Standard & Poor’s Ratings Service expects the US Justice Department and New York State officials to file civil charges against the firm, accusing S&P of fraudulently rating mortgage bonds that led to the financial crisis.
The Department of Justice had been involved in settlement negotiations with S&P until recently. However, the discussions were broken off after DOJ officials said they would seek a settlement in excess of $1 billion from S&P, which is owned by McGraw-Hill Company. This is the equivalent of about a year’s profits by the parent corporation. A lawsuit by the government now appears likely.
Standard & Poor’s is one of several US credit ratings agencies that issue reports and ratings of companies and their financial instruments as well as those of sovereign nations.