Tuesday, February 5th 2013 - 01:49 UTC

US government to sue Standard & Poor’s over 2007 mortgage-bonds assessments

Standard & Poor's says it is to be sued by the US government over the credit ratings agency's assessment of mortgage bonds before the financial crisis. The civil lawsuit would focus on S&P high ratings in 2007 for some mortgage-backed securities that later collapsed in value, said the agency.

Move follows a breakdown in talks between the Justice department and S&P, according to the Wall Street Journal

S&P says the case is entirely without factual or legal merit.

The suit would be the first such case over alleged wrongdoing by a ratings agency tied to the financial crisis. S&P said the justice department had informed them of the impending civil suit, although the federal agency declined to comment.

The move follows a breakdown in talks between the justice department and S&P, according to the Wall Street Journal. Several states are expected to join the suit, US media report.

Shares in S&P owner, the US publishing and media group McGraw Hill, fell 14% on Wall Street on Monday following the announcement, while those in fellow ratings agency Moody's fell 10% - indicating the market expects that they may be next in the justice department's sights.

S&P and other agencies have faced criticism from investors, politicians and regulators for assigning their top AAA ratings to thousands of sub-prime and other mortgage securities that later collapsed in value.

Such agencies are paid by the issuers of bonds and other securities for ratings, raising concern about potential conflicts of interest.

Grades assigned by these firms can affect a company's ability to raise or borrow money as well as how much investor will pay for their securities.

In the case of the sub-prime mortgage bubble, ratings agencies including S&P were hired to assess collateralised debt obligations (CDO) - complex financial transactions that packaged together thousands of loans to individual homebuyers.

The ratings agencies' job was to assess the likelihood that the home loans - and therefore the CDO - would ultimately be repaid. Their ratings enabled the investment banks which put the CDO together to then sell them to investors around the world.

In its January 2011 report, the US Financial Crisis Inquiry Commission called the agencies “essential cogs in the wheel of financial destruction” and “key enablers of the financial meltdown”.

S&P has previously disclosed a Securities and Exchange Commission (SEC) investigation into its rating of a specific 1.6bn CDO known as Delphinus CDO 2007-1.

Delphinus was the basis of a 127m settlement by Mizuho Financial Group over allegations that the US unit of the company obtained false credit ratings for the CDO using millions of dollars in dummy assets. It is unclear if Delphinus is included in the expected civil suit.

S&P has also faced lawsuits from investors, and argues its ratings constitute opinions protected by the First Amendment to the US Constitution.

The firm says it “deeply regrets” how its CDO ratings failed to anticipate mortgage market conditions as the financial crisis hit, and that it has since spent 400m to help bolster the quality of its ratings.

“Every CDO that [the department] has cited to us also independently received the same rating from another rating agency,” S&P said in a statement on Monday.

“The Department of Justice would be wrong in contending that S&P ratings were motivated by commercial considerations and not issued in good faith.”

35 comments Feed

Note: Comments do not reflect MercoPress’ opinions. They are the personal view of our users. We wish to keep this as open and unregulated as possible. However, rude or foul language, discriminative comments (based on ethnicity, religion, gender, nationality, sexual orientation or the sort), spamming or any other offensive or inappropriate behaviour will not be tolerated. Please report any inadequate posts to the editor. Comments must be in English. Thank you.

1 DanyBerger (#) Feb 05th, 2013 - 01:47 pm Report abuse
“S&P and other agencies have faced criticism from investors, politicians and regulators for assigning their top AAA ratings to thousands of sub-prime and other mortgage securities that later collapsed in value.”

And some countries like UK perhaps?
2 Ken Ridge (#) Feb 05th, 2013 - 05:09 pm Report abuse
@1 Tripple A rating eh? because we have earned it, we pay our debt, unlike you criminals, junk rating for Argies is all you deserve.
3 Hepatia (#) Feb 06th, 2013 - 12:22 am Report abuse
en.mercopress.com/2013/02/05/us-government-to-sue-standard-poor-s-over-2007-mortgage-bonds-assessments#comment212992: If Argentina's defaults raise you ire then the UK's defaults must make you livid!
4 Ayayay (#) Feb 07th, 2013 - 06:27 pm Report abuse
This is how countries with healthy judicial systems actually effect change.
5 Nostrolldamus the 10th (#) Feb 08th, 2013 - 02:20 pm Report abuse

Quote of the day... USA and “healthy” judicial system.

You know you North Americans and Europeans really deserve what is happening to you. Your children will be worse off than you, that is now inevitable. But this nonsense of insisting your institutions still work “for the people” as originally intended is your hamartia.

The USA and UK are at best “A” bond grade, and to actually be proud of your current rating (which by looking at the simple math numbers of debt to GDP plus primary deficit could not be more crystalline in that you are not), because some completely and thoroughly disreputed rating agencies says so makes it all the more pitiable.

This movie has only one ending: when you Euro-northams wake up to admit your countries are failed way off course, you will be deep in the middle of the proverbial doldrums. And well deserved.
6 Captain Poppy (#) Feb 08th, 2013 - 05:14 pm Report abuse
IS that what they are teaching in Rgentina these days? When you wan failure, go down to Puerto Madero and see what Asslips the Botox Bitch refuses to allow in the country. CHeck out the major grocery stores oin larger cities, not the riot infested rat holes like mendoza. rgentina is a classic example of how to run a country into the ground a a decade's time frame.
The poor child in the USA will never be barefoot and juggling on avenues like 9 de Juilo or 5 year olds begging at the Oblisk. Mom and dad whore their child out at such young ages.
When the USA default's to it's creditors like Rgentina has and continues to do so, then you can talk about downgrading their rating.

Rgentina HAS and IS in default of money owed

The USA is NOT in default and PAYS the debt it owes.

When we default, come back and slap me in the face and call me a “Rgentine deadbeat”

NOw go back and suck your momma's tit. Oh yeah.....and STILL no electricity in areas of BsAs........all from heat !!!
7 green_hat (#) Feb 09th, 2013 - 08:39 pm Report abuse
Captain Piss don't accept the fact that Boston is buried with snow and there is no electricity, transportation, communication , etc. for the next tree weeks!
The USA, my country is flat broke.
Captain Piss knows that on March 1, 2013 the reduction of services including military personnel and contractors are terminated.
There 49.5 millons USA citizens living below poverty levels!
He should concentrate on the USA 16 TRILLON DEBT instead of Argentina economy!
poor asshole!
8 Captain Poppy (#) Feb 09th, 2013 - 09:22 pm Report abuse
Snow......is that all you have is snow in Boston.....yup.....32 inches of it.......so what? Monday it's back to work. I would love to see 81 cm of snow fall on Buenos Aires .....lol.

BTW......green the envious color, probably the color of your balls and yellow blood.
Hey.....what s the poverty level in the USA in pesos?
9 DanyBerger (#) Feb 10th, 2013 - 06:07 am Report abuse
@ Crap Train PooP ys

Well what I can say after the wonderful post made by Mr.GreenHat showing you the lack of contact with reality about the financial situation of US you have?

Credit is a good thing but when is manageable and you invest that money in productive things or use it to close the gap in especial bad financial situation for short period of time.

But when you have been for 30 years living just on debt and borrowing like crazy that is a dangerous problem.

Many countries like happened to Argentina in the past have become “credit addicts” and that is the reason why is so important the AAA rating for them.

In other words a cocaine addict person with serious financial troubles is extremely happy because the agencies from cocaine dealers give him “AAA” credit rating to buy more cocaine.

No difficult to figure out that this guys will end without car, house, job, family, etc.

But that is not the whole figure about how bad is the situation for indebted countries.
In the near future will be a competition among indebted countries for borrowing cheap abroad.
Some the messy countries with no show of economy improvement will have to pay more spread because money will become a scarce commodity...

So tell me what is your plan to get out of the mess in which US its is?

Can you tell us how you an expert in economy how are you going to fix US structural economy problems?
10 Captain Poppy (#) Feb 10th, 2013 - 02:50 pm Report abuse
Dumburger.....I commend your attempt at speaking english, I really do, but can to ask la campora to return the previous dumburger, he at least spoke somewhat more comprehensively.
I was going to say that:
1-rgentina should not be lecturing anyone on managing responsible debt with the largest default in the history of nations.
2-You trolls talked about January 1st.....now march 1st....hold onto you dreams of a nightmare, better yet, hold your breath until the big day.
3-The USA economy is weak but not dead. We do not stop imports to the point of hurting the economy like the Great Cunt of Rgentina does, did you see the those rusting containers in the port?
But I will not because you are not in rgentina. When the USA defaults and screws the people they borrowed money from, then you have some legitimacy to the fractured words you speak. When the USA hits double digit inflation, double digit unemployment, when construction declines like rgentina's, when the dollar
( which the strength is based on demand, not set rates by the government) declines ....like the RG peso, or anyother other SA curency, then you may be onto so something. Until the USA collapse's, you continue to speak from a wishful think P.O.V. In the meantime, you troll have nothing but mere contempt and contempt will not collapse a nation. You most of have lack the most legitimacy and you know why.
If you really want an anwser to what is going to happen economically, ask my government. Unlike rgentina, the president here DOES speak to the media and does not try to dismantle the media. Not being in rgentina you would not know that. Not being in the USA you would not know anything. All your internet reading makes you a man with a paper asshole when you make statements.
11 bob_99 (#) Feb 10th, 2013 - 06:25 pm Report abuse
Obama in the USA is known as the “food stamps” president.
He is nothing more than a CHARLATAN....
the USA is sinking....
16 TRILLON dollars in DEBT ....
and increasing ...
Last week Obama did not respond the reporters questions about the financial fears....
Obama said “he has a Press Secretary”
The USA Post Office has 8 billons deficit
Starting August 1 there is mail delivery on Saturday
Crime is increasing
Illegal immigration keep increasing
What this “captain” can do about these problems: NOTHING!
12 DanyBerger (#) Feb 10th, 2013 - 06:43 pm Report abuse
@Crap Tain PooP Y

You are the most idiot person I have ever met in planet earth.

1- US had defaulted several times in history.

1790 Alexander Hamilton on national debt (hair cut and debt restructuring)
1903 on Panama’s debt, US refused to pay in gold de debt owed to Panama due to the treaty of 1903.
1933 Repudiation of national debt during big depression.
1979 defaulted on treasuries bills


Also last year US was close to default when the congress didn’t want to rise the debt limit.

2- US already has a double digit unemployment idiot.

US has 6 measurement grades that range from U1 to U6 (U1, U2, U3, U4, U5, U6) what the US govt. Show to the idiots and is replicated by the propaganda media in US is U3.

U3 Does not contain people that is unemployed by different circumstances and also who were not long term unemployment or discouraged workers, etc.

The US INDEC Moreno style also cooks the books and even though you can see that unemployment in US is 15.4%. What in reality would be close to 19%.


3- Idiots like you in US never have a clue about what is going on because live in deny like you do.

Seems everybody knows that US’s economy is worsening and worsening but you.

4- Ask your government? Are you joking?

Hello Obama how is going the economy? Fine mate just fantastic yes we can.

Ha ha How idiot are you

Brainwashed who?

BTW more bad news for you “waiving flag idiot”, China had surpassed US as a major trader in the world.

Do you know what that means?

Ready to clean toilettes in Tijuana?
Bye bye...
13 Captain Poppy (#) Feb 10th, 2013 - 09:37 pm Report abuse
you're like a broken record, or just broken. I keep waiting to hear that popping sound of your head coming out of your asshole. Why do you not go back home to your motherland.......are you on the lame? Honestly, I would return either if I were the head lice like you and had a pack of nits. Even you nits do not deserve to live in rgentina.
I've been to every place I critique.....have you? I can hardly wait until March 1st comes and goes and nothing happens.

I think you trolls should be named to chicken little. Pollo poco. You cry about the USA collapsing, you get brown stains in you panties thinking the Falklands are rgentina's, you screw investors and retirees out of hundreds of billions of dollars in debt you refuse to pay back that you legally borrowed. Grew up or just fade away......just fade away. Rgentina will end up a mere stain of a wet fart on the world map, cleansed away with bleach and the world will be none the wiser you ever existed. Everyday I call friends in Corritentes, it takes 20 calls because they always get disconnected, but never in BsAs. When will rgentina upgrade their infrastructure to the modern world. You don't even have caller ID outside of BsAs city.
BTW you never met you you fucking imbecile. Hey.....I got one for you.....what's the difference between a fart and an rgentine? The stink of a fart eventually fades away.

Caio gracias
14 ann_25 (#) Feb 10th, 2013 - 09:55 pm Report abuse
did you pay the $800 pesos restaurant meal? Such amount is not expensive...
I called Formosa and my friends are doing well
15 Captain Poppy (#) Feb 11th, 2013 - 12:32 am Report abuse
Good for them who said I paid 800 pesos for a meal?
16 jon and johnie (#) Feb 11th, 2013 - 12:36 am Report abuse
I just called Entre Rios and everyone is doing well!
17 Captain Poppy (#) Feb 11th, 2013 - 11:07 am Report abuse
Try Mercedes....they even lost electricity last not....another heat thing. They laughed when I blasted the phone and electricity and said it happens all, repeat....all the time. The phones cut out every day during calls because the system there is even older than in BsAs. When I was in Missiones, electricity went out twice in one week. Once while waiting 40 minutes in line for gas.
Life in Rgentina!!
18 Hepatia (#) Feb 11th, 2013 - 12:02 pm Report abuse
en.mercopress.com/2013/02/05/us-government-to-sue-standard-poor-s-over-2007-mortgage-bonds-assessments#comment215752: You should change your job. The one you have now, which requires you to travel to Argentina, is obviously causing you a lot of stress.
19 DanyBerger (#) Feb 11th, 2013 - 01:31 pm Report abuse
@Crap Tain PooP Y?

“Pollo poco” that is really good in what language is that US Spanglish?

And little brain how would be? “Mente Poco”?

Lets me see if I can make a sentence with that...

I’m a Yankee “Mente Poco” that feels “Pollo Poco”.

No so bad for being my first time trying with US Spanglish. Isn’t it?

Anyway still US having 2 digit unemployment, close to collapse, China new world trader, US 16 trillions debt and not electricity, fuel, phone service in many US cities and states.

And I don’t want to mention the cuts in basic services in many states like California for lack of money and in some states their are turning paved roads into unpaved to save money in maintenance.

Sad, very sad indeed...
20 Captain Poppy (#) Feb 11th, 2013 - 01:49 pm Report abuse
Stop smoking crack dumburger.....and please go back to rgentina and get a good look at it's collapse.

what is the value of the rg peso?

and if you believe that the USA hasa not electricity or phone service.....give me your phone number and I will gladly call you from your safe, comfortable home in Europe
21 jorge_68 (#) Feb 11th, 2013 - 03:10 pm Report abuse
@ 20
captain piss
The USA is worst: cyber attacks at any time!
and mother nature tornadoes can destroy half of the country!
22 Captain Poppy (#) Feb 11th, 2013 - 03:30 pm Report abuse
I know trolls are stupid but help me gage the level. Do you believe what you are given to type?
23 gay from London (#) Feb 11th, 2013 - 05:13 pm Report abuse
@22 Captain popeye
I can legally marry you in London
24 liza (#) Feb 11th, 2013 - 06:20 pm Report abuse
@ 22
if trolls are stupid why YOU continue responding?
Merco-british crap-Press is boring.
25 Captain Poppy (#) Feb 11th, 2013 - 06:32 pm Report abuse
Is that your logic, stupid people are to be ignored?
26 DanyBerger (#) Feb 11th, 2013 - 06:36 pm Report abuse
@Crap Tain PooP Y

currently in boston 15000 without electricity power.

More in the north 600.000 without electricity power.

You are in Tijuana that is the reason you have electricity and phone service.
27 AB_90 (#) Feb 11th, 2013 - 06:36 pm Report abuse
go to sleep british ashole!
28 Captain Poppy (#) Feb 11th, 2013 - 07:53 pm Report abuse
Lo, you a fucking joke dumburger. Of course people are without electricity. We had over 3 feet of snow you moron. We also have thousands of crews working to restore power. Everyone reading your post regarding people without power after a snowstorm are laughing.....not with you....at you.
You have no legitimacy to anything you say as you have never been here. You are kirchner's court jester.....her personal bidet.
29 liza (#) Feb 11th, 2013 - 09:34 pm Report abuse
@ 28
The USA in under a Cyber attack. You need to watch CNN more often!
Tomorrow Charlatan Obama will tell in his speech that the USA needs to borrow more money from third world countries to keep afloat, that starting March 1 millons of people will be terminated from their jobs because of the Budget reduction that will take place, that GUN CONTROL cannot stop the massive killing of inocent children attending school, that IMMIGRATION REFORM won't stop the millons of illegal mexican drug dealers, that HE cannot do anything to improve the ECONOMY.
In other words, Charlatan OBAMA is nothing more than a CHARLATAN!
30 Captain Poppy (#) Feb 11th, 2013 - 09:45 pm Report abuse
Oh my.....I think I will move to Rgentina! When I need to shit on someone.
31 liza (#) Feb 11th, 2013 - 09:59 pm Report abuse
32 DanyBerger (#) Feb 12th, 2013 - 12:20 am Report abuse
@Crap Tain PooP Y

“and if you believe that the USA hasa not electricity or phone service.....give me your phone number and I will gladly call you from your safe, comfortable home in Europe”

Still 150.000 People in Boston without electricity and phone service.
Still 600.000 in the north without electricity and phone service.
Still NY having fuel shortage and people without electricity.

Still unemployment in US rising.

Still US’s Economy shrinking.

Still 60millions poor in US.

Still shantytowns everywhere.

China took over US as a world’s biggest trader...

All facts...
33 Captain Poppy (#) Feb 12th, 2013 - 12:34 am Report abuse
Compare natural disasters to why things happen in rgentina..........lol. Yes do the math China 1,400,000,000 versus the USA 317,000,000. Of course as long as they can maintain there............
You are one clever fucking troll. Have maximo the fat fuck kirchner bend you over and tickle your prostate as a reward!!!!
34 jonas_Bs.As. (#) Feb 12th, 2013 - 03:58 am Report abuse
What “maximo” has to do with this?
Nobody picks on Charlatan Obama daughters!
35 DanyBerger (#) Feb 12th, 2013 - 05:54 am Report abuse
@Crap Tain PooP Y

The only natural disaster you have got are those corrupted politicians that you have in congress and you vote for president.

Hurricane GW Bush and Oboso earthquake are a good example of that...

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!


Get Email News Reports!

Get our news right on your inbox.
Subscribe Now!