facebook
twitter
rss
account
search
search
 

Illinois sues Standard & Poor's

Jan. 25, 2012 at 6:18 PM   |   Comments

| License Photo
CHICAGO, Jan. 25 (UPI) -- Illinois sued Standard & Poor's Wednesday, alleging it fueled the housing market crash with its unwarranted high ratings to risky mortgage-backed investments.

In a lawsuit filed in Cook County Circuit Court, state Attorney General Lisa Madigan alleges S&P compromised its independence as a ratings agency by assigning high ratings to unworthy, risky investments as a corporate strategy to increase its revenue and market share.

In a release posted on the attorney general's Web site, Madigan alleges S&P shrugged off the increasing risks posed by mortgage-backed securities and gave the investment pools ratings that were favorable to its investment bank clients and S&P's profits.

"Publicly, S&P took every opportunity to proclaim their analyses and ratings as independent, objective and free from its desire for revenue," Madigan said. "Yet privately, S&P abandoned its principles and instead used every trick possible to give deals high ratings in order to retain clients and generate revenue. The mortgage-backed securities that helped our market soar -- and ultimately crash -- could not have been purchased by most investors without S&P's seal of approval."

The lawsuit cites internal e-mails and conversations among S&P employees in the run-up to the housing market's collapse as evidence the company misrepresented its ratings as objective and independent.

Topics: Lisa Madigan
© 2012 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
GM recalls 221,000 Cadillacs and Impalas GM recalls 221,000 Cadillacs and Impalas
2
New National Security Cutter delivered to Coast Guard New National Security Cutter delivered to Coast Guard
3
First MT30 engine for Korean Navy frigates passes acceptance tests First MT30 engine for Korean Navy frigates passes acceptance tests
4
Ukraine's State Guard Service receives armored personnel carriers Ukraine's State Guard Service receives armored personnel carriers
5
Navy's Triton surveillance drone flies cross-country Navy's Triton surveillance drone flies cross-country
Trending News
Video
x
Feedback