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S&P expects U.S. lawsuit over pre-crisis credit ratings

Home - by - February 5, 2013 - 09:30 America/New_York - 7 Comments

 

The Standard and Poor's building in New York is seen in this file photo taken August 3, 2012. REUTERS/Charles Platiau/Files

(Reuters) – Standard & Poor’s said it expects to be the target of a U.S. Department of Justice civil lawsuit over its mortgage bond ratings, the first federal enforcement action against a credit rating agency over alleged illegal behavior tied to the recent financial crisis.

Shares of McGraw-Hill Cos, the parent of S&P, plunged 13.8 percent on Monday after news of the pending lawsuit surfaced, their biggest one-day percentage decline since the 1987 stock market crash, according to Reuters data.

An announcement of a lawsuit is expected on Tuesday, a person familiar with the matter said.

The news also caused shares of Moody’s Corp, whose Moody’s Investors Service unit is S&P’s main rival, to slide 10.7 percent.

It is unclear why regulators may be now focusing on S&P rather than Moody’s or Fimalac SA’s Fitch Ratings.

 

MORE:    http://www.reuters.com/article/2013/02/04/us-mcgrawhill-sandp-civilcharges-idUSBRE9130U120130204

» 7 Comments

  1. MNHawk

    February 5th, 2013

    “It is unclear why regulators may be now focusing on S&P rather than Moody’s or Fimalac SA’s Fitch Ratings.”

    For those of us not burdened with a Journalism School degree it isn’t so hard.

    A clue.

    AA

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  2. Edith McCrotch

    February 5th, 2013

    “Voting is the best revenge.”

    Barrack Obama, November 2, 2012

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  3. Edith McCrotch

    February 5th, 2013

    What I meant to add is that there must be a revenge motive on why the DOJ investigation.

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  4. J Frank Parnell

    February 5th, 2013

    There are many other rating agencies that will hammer our credit rating. Investors, the ultimate “raters” will continue to downgrade our currency. Anybody in the equity markets now is a pure D sucker.

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  5. Stranded in Sonoma

    February 5th, 2013

    The double-A is actually close to a “C” in real world grading. Forget the pluses and minuses. Just go with the letters.

    AAA A
    AA+ B
    AA C
    AA- D
    A+ F

    You don’t want to know about anything lower than A+/F. Which tells you how bad our credit rating really is.

    The only reason the feds are initiating this suit is to punish those telling the truth. 0bama cannot be shown to be the failure that he truly is.

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  6. MNHawk

    February 5th, 2013

    “You don’t want to know about anything lower than A+/F.”

    Those in crapholes like Illinois beg to differ.

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  7. Tim

    February 5th, 2013

    It’ll keep the rest of em in line, too.

    As I said, the gov’t is a criminal organization.

    Holder is the enforcer thug.

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