S&P To Pay $1.37B in Fed Mortgage Settlement
Standard & Poor's will pay $1.37B in a settlement pertaining to federal claims it knowingly inflated mortgage investment ratings and fed into the financial crisis.
"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 today during the Justice Department's announcement of S&P's settelement with the federal government, District of Columbia and 19 states.
The government alleged that S&P manipulated ratings of subprime mortgages between 2004 and 2007. The ratings agency's parent company, McGraw Hill Financial, noted that the settlement includes no evidence of explicitly illegal activity. This news follows a decision by financial firms to pay more than $40B to close federal and state investigations that have sought to hold banks and other companies accountable for the worst economic crisis since the Great Depression.