The suit was filed by the Justice Department on behalf of the Environmental Protection Agency and seeks sanctions that could reach more than $18 billion. Although expected, the suit sent Volkswagen shares lower early on Tuesday, trading down four per cent at €121.30 each.

Out of court

ING said in a research note: ‘We [previously] assumed around €12 billion ($13 billion) in fines, we are not convinced yet that the number will be significantly above this when a final settlement is reached.’ Analysts at ING said they anticipate Volkswagen will attempt to settle the matter out of court.

Not the end

It’s unlikely that the suit will be the final step in the US government’s pursuit of Volkswagen, but instead could be an opening that paves the way for other actions. Monday’s legal action doesn’t include criminal charges against Volkswagen or its executives, and federal prosecutors are in the midst of a separate criminal investigation in to the auto maker. Source: The Wall Street Journal