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S&P tried to defraud investors says US Justice Department

Posted on February 5th, 2013 at 20:36 by John Sinteur in category: Robber Barons -- Write a comment

[Quote]:

The US Justice Department has confirmed it will sue Standard and Poor’s over a “scheme to defraud investors” before the financial crisis.

Attorney General Eric Holder announced that the Department had filed a civil lawsuit against the firm over the way it rated mortgage bonds.

“This alleged conduct is egregious and it goes to the very heart of the recent financial crisis,” he said.

[Quote]:

For many years, the ratings agencies have defended themselves successfully in civil litigation by saying their ratings were independent opinions, protected by the First Amendment, which guarantees the right to free speech. Developments in the wake of the financial crisis have raised questions about the agencies’ independence, however. For example, one federal judge, Shira A. Scheindlin, ruled in 2009 that the First Amendment did not apply in a lawsuit over ratings issued by S&P and Moody’s, because the mortgage-backed securities at issue had not been offered to the public at large. Scheindlin also agreed with the plaintiffs, who argued the ratings were not opinions, but misrepresentations, possibly the result of fraud or negligence.

  1. I’m sorry to say my bet is they will cop a plead, pay a huge fine (out of the business) and everyone goes home. How this differs from government as organized crime racket I cannot say.

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