facebook
twitter
rss
account
search
search
 

Conn. AG sues major bond-rating firms

July 30, 2008 at 3:06 PM   |   Comments

HARTFORD, Conn., July 30 (UPI) -- Connecticut Attorney General Richard Blumenthal Wednesday sued three bond-rating firms for allegedly costing taxpayers millions of dollars.

The Democratic attorney general sued Moody's Investors Service, Standard & Poor's and Fitch Ratings, Legal Newsline reported.

Blumenthal claimed the rating agencies engaged in "deceptive and unfair practices" that cost taxpayers extra interest and insurance costs for municipal bonds. "We are holding the credit-rating agencies accountable for a secret Wall Street tax on Main Street," Blumenthal said.

He added that because the credit-rating firms "knowingly and systematically" gave the securities lower grades than comparable corporate and structured debt, costs were unfairly increased for state and local governments, including school districts and sewer and water districts.

"This rating charade created a Wall Street shell game constructed by the ratings agencies for the benefit of the bond insurers," he said.

The credit- and bond-rating companies said in statements they dispute Blumenthal's claims, Legal Newsline reported.

Moody's Chief Executive Officer Raymond McDaniel called the lawsuit without merit. "The suit implies that the measuring system is wrong," McDaniel said. "That's like saying it's wrong to measure distance in centimeters and right to measure it in inches."

© 2008 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Most Popular
1
Tesla could face sales ban in Michigan Tesla could face sales ban in Michigan
2
Early completion of refit of Italian aircraft carrier Early completion of refit of Italian aircraft carrier
3
British Reaper UAVs join the fight against Islamic State British Reaper UAVs join the fight against Islamic State
4
API: U.S. leverage hurt by oil export ban API: U.S. leverage hurt by oil export ban
5
Official: Iran's economy too vulnerable to oil market Official: Iran's economy too vulnerable to oil market
Trending News
Around the Web
x
Feedback