US Sues S&P over Pre-Crisis Mortgage Ratings
Posted at: 02/05/2013 10:03 AM
WASHINGTON (AP) - The U.S. government is accusing the debt rating agency Standard & Poor's of civil fraud for giving high ratings to risky mortgage bonds that helped bring about the financial crisis.
The government said in a complaint filed late Monday that S&P misled investors by stating that its ratings were objective and "uninfluenced by any conflicts of interest." It said S&P's desire to make money and gain market share caused S&P to ignore the risks posed by the investments between September 2004 and October 2007.
The alleged fraud made it possible to sell the investments to banks. The government charged S&P under a law aimed at making sure banks invest safely.
S&P has denied wrongdoing. S&P is a unit of McGraw-Hill Cos. Inc.
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