Tuesday, February 05, 2013

U.S. Accuses S.&P. of Fraud in Suit on Loan Bundles - NYTimes.com

This took longer than expected.

U.S. Accuses S.&P. of Fraud in Suit on Loan Bundles - NYTimes.com:

"The Justice Department filed civil fraud charges late on Monday against the nation’s largest credit-ratings agency, Standard & Poor’s, accusing the firm of inflating the ratings of mortgage investments

From September 2004 through October 2007, S.&P. “knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors” in certain mortgage-related securities, according to the suit filed against the agency and its parent company, McGraw-Hill Companies. S.&P. also falsely represented that its ratings “were objective, independent, uninfluenced by any conflicts of interest,” the suit said."
From the AP (via Crains' New York Business)

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

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