S&P reaches $ 1.5 b deal with US, states over crisis-era ratings

Monday, 9 February 2015 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Ratings firm Standard & Poor’s will pay $1.5 billion to resolve a series of lawsuits over its ratings on mortgage securities that soured in the runup to the 2008 financial crisis, the company said last week. 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 U.S. Department of Justice, and $687.5 million to 19 states and the District of Columbia, which had filed similar lawsuits over the ratings. 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 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. “It could be structured by cows and we would rate it,” according to an excerpt from an instant-messaging exchange between two S&P analysts that was cited in the lawsuit. “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,” said Attorney General Eric Holder said in announcing the settlement. Under the deal, S&P does not admit to any violations of law.

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.