Standard & Poor’s, getting its first shot in open court at U.S. Justice Department claims it should pay as much as $5bn in civil penalties, will defend itself by arguing reasonable investors wouldn’t have relied on its 'puffery' about credit ratings.
Standard & Poor’s practices for grading commercial property bonds since the 2008 credit crisis are drawing scrutiny from Massachusetts authorities, according to three people with knowledge of the matter.
One former Standard & Poor’s analyst who told his bosses that they shouldn’t weaken their standards to win more business finds himself at the heart of the U.S. Justice Department’s $5bn case against the ratings firm.
The U.S. Justice Department late Monday filed civil fraud charges against the nation’s largest credit-ratings agency, Standard & Poor’s, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck.
Standard & Poor’s Japan unit was ordered by the nation’s financial watchdog to improve its system for verifying and updating credit ratings in the regulator’s first action against a ratings company.