S&P Strikes Back At Federal Prosecutors

Standard & Poor’s says it has been unfairly targeted by DOJ as payback for S&P’s downgrade of the federal government’s credit rating two years ago. The Justice Department is suing Standard & Poor’s over its ratings practices just before the financial crisis, alleging the company engaged in fraud when it gave high ratings to mortgage-backed securities and collateralized debt obligations even though it knew the housing market was deteriorating, and that it tilted ratings to favor investment banks that were its clients. Standard & Poor’s has argued it was not alone in failing to anticipate the housing crash, and that its decision to lower the federal credit rating is protected free speech.