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
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