Citigroup to pay $7B in subprime mortgages probe
WASHINGTON (AP) — Citigroup agreed Monday to pay $7 billion to settle a federal investigation into its handling of risky subprime mortgages, admitting to a pattern of deception that Attorney General Eric Holder said “shattered lives” and contributed to the worst financial crisis in decades.
The settlement represents a moment of reckoning for one of the country’s biggest and most significant banks, which will now be responsible for providing financial support to Americans whose lives were dismantled by the largest economic meltdown since the Great Depression.
US companies look overseas for tax bill relief
A growing number of U.S. companies are looking to trim their tax bills by combining operations with foreign businesses in a trend that may eventually cost the federal government billions of dollars in revenue.
Generic drugmaker Mylan Inc. said Monday it will become part of a new company organized in the Netherlands in a $5.3 billion deal to acquire some of Abbott Laboratories’ generic-drugs business. The deal is expected to lower Mylan’s tax rate to about 20 per cent to 21 per cent in the first full year and to the high teens after that.
Emerging nations plan their own World Bank, IMF
WASHINGTON (AP) — Fed up with U.S. dominance of the global financial system, five emerging market powers this week will launch their own versions of the World Bank and the International Monetary Fund.
Brazil, Russia, India, China and South Africa —the so-called BRICS countries — are seeking “alternatives to the existing world order,” said Harold Trinkunas, director of the Latin America Initiative at the Brookings Institution.
At a summit Tuesday through Thursday in Brazil, the five countries will unveil a $100 billion fund to fight financial crises, their version of the IMF. They will also launch a World Bank alternative, a new bank that will make loans for infrastructure projects across the developing world.
A tale of 2 markets: Argentina sinks, Germany up
LONDON (AP) — It’s not just Argentine soccer fans who woke up depressed following their nation’s 1-0 defeat to Germany in the World Cup final. Traders in Buenos Aires were also feeling blue.
Though Argentina’s main Merval index closed up 0.2 per cent on Monday, it traded sharply lower for much of the session after the team succumbed to a late goal Sunday from German striker Mario Goetze in Rio de Janeiro.
Despite the late advance, the Merval underperformed other markets in the region and around the world, notably Germany’s DAX, which closed 1.2 per cent higher — the biggest gain Monday among the major European stock indexes.
The underperformance was widely anticipated.
VW to build new SUV in Tennessee, add 2,000 jobs
NASHVILLE, Tenn. (AP) — Volkswagen plans to build a new seven-passenger SUV at its factory in Chattanooga, Tennessee, adding about 2,000 factory jobs as it tries to reverse U.S. sales that have fallen for the past two years.
The German automaker announced Monday that it will invest $600 million to expand the factory and set up a new research centre that will employ about 200 engineers.
The announcement comes after months of political wrangling over the role of organized labour at the factory, which now employs about 2,400 workers and makes only one model, the Passat midsize car.
Samsung suspends China supplier over child labour
SEOUL, South Korea (AP) — Samsung Electronics Co. said it has suspended business ties with a Chinese supplier that allegedly hired children.
The South Korean company, which is the world’s biggest smartphone maker, said in its blog Monday that it had found possible evidence of child labour and illegal hiring at Dongguan Shinyang Electronics Co.
Samsung said last week it would urgently look into the Chinese supplier following a New York-based watchdog’s report that it hired at least five children under the age of 16.
China indicts US, British corporate investigators
BEIJING (AP) — Chinese authorities have indicted British and American investigators hired by GlaxoSmithKline on charges of illegally obtaining and selling private information, state media reported Monday, as the Briton blamed the pharmaceutical company for misleading and using him.
British investigator Peter Humphrey and his wife Yingzeng Yu, a U.S. citizen, were charged in Shanghai’s No. 1 Intermediate People’s Court, the official Xinhua News Agency said. It said this is the first time foreigners have faced such charges.
Humphrey, 58, and Yu, 61, are part of an industry of investigators who help corporate clients screen potential partners and employees or watch for embezzlement and other employee misconduct.
Man United lands $1.3 billion, 10-year Adidas deal
Manchester United landed the richest uniform deal in soccer, a $1.3 billion, 10-year agreement with Adidas that replaces its Nike sponsorship.
The contract, worth an average of $128 million a year beginning in 2015, was announced after Nike decided against tripling the cost of its existing 13-year agreement.
The arrangement with Adidas underlines the durability of United’s brand.
Adidas currently pays about $50 million a season to Chelsea and Real Madrid, and United could make far more from the German sportswear firm than the $1.3 billion, which is described as a “minimum guarantee.”
Haslam-owned truck-stop chain to pay $92M fine
NASHVILLE, Tenn. (AP) — Authorities say the truck-stop company owned by Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam has agreed to pay $92 million in fines for cheating customers out of promised rebates and discounts.
According to the U.S. Attorney’s Office for the Eastern District of Tennessee, Pilot Flying J has accepted responsibility for the criminal conduct of its employees, ten of whom have pleaded guilty to participating in the scheme.
The agreement was signed Friday by attorneys for the nation’s largest diesel retailer. The agreement does not protect any individual at Pilot from prosecution and requires the company to co-operate with an ongoing investigation of current and former employees.
By The Associated Press=
The Dow Jones Industrial average rose 111.61 points, or 0.7 per cent, to close at 17,055.42. The Standard & Poor’s 500 index rose 9.53 points, or 0.5 per cent, to 1,977.10. The Nasdaq composite index rose 24.93 points, or 0.6 per cent, to 4,440.42.
Benchmark U.S. crude for August delivery rose 8 cents at $100.91 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils, gained 45 cents to $107.71 on the ICE Futures exchange in London. Wholesale gasoline added 2 cents to $2.93 a gallon. Natural gas was flat at $4.15 per 1,000 cubic feet. Heating oil gained 1 cent to $2.87 a gallon.