Standard & Poor's expects lawsuit

Posted

WASHINGTON (AP) -- The U.S. government is expected to file civil charges against Standard & Poor's Ratings Services, alleging that it improperly gave high ratings to mortgage debt that later plunged in value and helped fuel the 2008 financial crisis.

The charges would mark the first enforcement action the government has taken against a major rating agency involving the worst financial crisis since the Great Depression.

S&P said Monday that the Justice Department had informed it that it intends to file a civil lawsuit focusing on S&P's ratings of mortgage debt in 2007. The action does not involve any criminal allegations.

S&P denies any wrongdoing and says any lawsuit would be without merit.

A lawsuit would "disregard" the fact that S&P reviewed the same data on risky mortgages as U.S. government officials, who said publicly in 2007 that the problems in the subprime mortgage market appeared to be limited, the company said in a statement.

In the statement, S&P said it "deeply regrets" that its ratings on some securities "failed to fully anticipate the rapidly deteriorating conditions in the U.S. mortgage market during that tumultuous time."


TALK TO US

If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.

Powered by Creative Circle Media Solutions