Complinet logo
Contact us

U.S. launches civil action against S&P over pre-crisis ratings

Feb 05 2013 Aruna Viswanatha, Reuters

The U.S government has launched a civil lawsuit against Standard & Poor's and parent The McGraw-Hill Companies Inc over mortgage bond ratings, the first federal enforcement action against a credit rating agency over alleged illegal behavior tied to the recent financial crisis. The government said in a court filing it was seeking civil money penalties from S&P and McGraw Hill. "Considerations regarding fees, market share, profits, and relationships with issuers improperly influenced S&P's rating criteria and models," the government said. "The lawsuit itself may prove less significant than the message it sends … The government is serious about holding rating agencies responsible, and that they must be much more careful."Shares of McGraw-Hill plunged 13.8 percent on Monday after the company said it was expecting the lawsuit, marking their biggest one-day percentage decline since the 1987 stock market crash, according to Reuters data. The news also caused shares of Moody's Corp, whose

Already have an account?

Log in

Want to read this article?

Click here for a free 14 day trial