Standard & Poor's Ratings Services has agreed to pay $1.375 billion to resolve multiple lawsuits filed by the U.S.. Department of Justice as well as twenty attorneys general from around the country. The suits alleged S&P provided overly optimistic ratings to asset backed securities that became toxic creating the credit and financial crisis of 20078-2009. The suits also accused S&P of lowering its rating standards to win mortgage-backed securities rating business and other bond deals before the financial crisis and then saw those same securities implode amongst a cascade of borrower defaults and causing billions of dollars in investor losses.
The nearly $1.4 billion fine represents the largest ever assessed against a credit rating agency, which are hired by investment banks to rate the investment quality of debt offerings and other securities, the government said. The proceeds will be split with The Department of Justice receiving $687.5 million, while thee attorneys general from 19 states and Washington D.C.. will split the other $687.5 million. As is customary in settlement of this nature, the agreement states the parties resolved the matter to avoid the time, expense and uncertainty of protracted litigation.
If you suffered losses related to mortgage or asset backed securities during the financial crisis, you have a limited time to file a claim to recover damages. Please contact the experienced securities fraud attorneys at Colling Gilbert Wright & Carter for a complimentary case evaluation.