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Standard & Poor's agrees to pay 1.5bn dollars to solve lawsuits from the 2008 financial crisis

Wednesday, February 4th 2015 - 08:21 UTC
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S&P parent McGraw Hill Financial will pay 687.5m to the US Department of Justice, and 687.5m to 19 states and the District of Columbia S&P parent McGraw Hill Financial will pay 687.5m to the US Department of Justice, and 687.5m to 19 states and the District of Columbia

Credit ratings firm Standard & Poor's will pay 1.5 billion dollars to resolve a series of lawsuits over its ratings on mortgage securities that soured in the run-up to the 2008 financial crisis, the company announced on Tuesday. The settlement comes after more than two years of litigation as S&P fought allegations it issued overly rosy ratings in order to win more business.

 S&P parent McGraw Hill Financial Inc said it will pay 687.5 million to the US Department of Justice, and 687.5 million to 19 states and the District of Columbia, which had filed similar lawsuits over the ratings.

Late Monday, the firm also reached a separate 125 million settlement with public pension fund California Public Employees’ Retirement System, which had sued S&P in 2009, claiming its inaccurate ratings caused the firm hundreds of millions of dollars in losses.

The United States sued S&P in 2013 after initial settlement talks broke down, accusing the ratings agency of defrauding investors and seeking 5 billion dollars in one of the most ambitious cases the Justice Department has fought tied to the financial crisis.

In a 119-page complaint, the government said S&P delayed updates to its ratings criteria and analytical models between September 2004 and October 2007, weakening its criteria in a desire to gain more business from the investment banks that issued the securities.

“On more than one occasion, the company’s leadership ignored senior analysts who warned that the company had given top ratings to financial products that were failing to perform as advertised,” Attorney General Eric Holder said in announcing the settlement.

Categories: Economy, United States.

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  • Hepatia

    They got off very lightly. The federal gov. should have thrown the book at these criminals.

    Feb 05th, 2015 - 03:39 am 0
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