US accuses Standard & Poor's of fraudulently issuing high ratings

Standard & Poor's expects lawsuit over subprime ratings

The Standard and Poor's building in New York is seen in this file photo 3 August 2012 S&P says it "deeply regrets" how its CDO ratings failed to anticipate mortgage market conditions

Related Stories

Standard & Poor's says it is to be sued by the US government over the credit ratings agency's assessment of mortgage bonds before the financial crisis.

The civil lawsuit would focus on S&P's high ratings in 2007 for some mortgage-backed securities that later collapsed in value, said the agency.

S&P says the case is entirely without factual or legal merit.

The suit would be the first such case over alleged wrongdoing by a ratings agency tied to the financial crisis.

S&P said the justice department had informed them of the impending civil suit, although the federal agency declined to comment.

The move follows a breakdown in talks between the justice department and S&P, the Wall Street Journal reports.

McGraw-Hill Companies Inc.


Last Updated at 04 Feb 2013, 15:57 ET McGraw-Hill Companies Inc. one month chart
price change %
50.30
0.00
0.00

Several states are expected to join the suit, US media report.

Shares in S&P's owner, the US publishing and media group McGraw Hill, fell 14% on Wall Street on Monday following the announcement, while those in fellow ratings agency Moody's fell 10% - indicating the market expects that they may be next in the justice department's sights.

'Key enablers'

S&P and other agencies have faced criticism from investors, politicians and regulators for assigning their top AAA ratings to thousands of subprime and other mortgage securities that later collapsed in value.

Such agencies are paid by the issuers of bonds and other securities for ratings, raising concern about potential conflicts of interest.

http://www.bbc.co.uk/news/21331018#sa-ns_mchannel=rss&ns_source...

Tags: &, Poor's, Standard, US, accuses, fraudulently, high, issuing, of, ratings

Views: 63

Reply to This

Please remember this website is supported by your donations...

12160 NEWS (new management/admin info)

Report an Issue

>

Forum

© 2014   Created by truth.

Badges  |  Report an Issue  |  Terms of Service

content and site copyright 12160.info 2007-2014 - all rights reserved. unless otherwise noted