Feb 4 (Reuters) - Federal and state prosecutors intend to bring civil charges against Standard & Poor's for wrongdoing in its rating of mortgage bonds prior to the 2008 financial crisis, The Wall Street Journal said on Monday, citing people familiar with the matter.
Allegations against the McGraw-Hill Cos unit will center on the model used to rate the bonds and will be made in lawsuits to be filed as soon as this week, the newspaper said, citing the people.
A move by U.S. officials would be the first federal enforcement action against a major credit rating agency over alleged illegal behavior tied to the financial crisis.
Several state attorneys general are expected to join the case, the newspaper said.
McGraw-Hill and the U.S. Department of Justice were not immediately available for comment.
Shares of McGraw-Hill traded as much as 2.6 percent lower following news of the possible charges. In afternoon trading, they were down $1.21, or 2.1 percent, at $57.13.
S&P and its main rivals, Moody's Corp's Moody's Investors Service and Fimalac SA's Fitch Ratings, have long faced criticism from investors, politicians and regulators for assigning high ratings to thousands of subprime and other mortgage securities that quickly turned sour.
In a variety of lawsuits brought by investors, S&P has maintained that its ratings constitute opinions protected by the 1st Amendment to the U.S. Constitution. (Reporting by Jonathan Stempel in New York; Editing by Steve Orlofsky)
Standard & Poor's says it will face Justice Dept suit over subprime ratings - Feb. 4, 2013
S&P To Face Charges From States, U.S. Over Wrongdoing Before Financial Crisis: Report
this probably makes the most sense for the first round of charges....what are the coli's thoughts??? what outlets will you be checking as your sources for the case???
Allegations against the McGraw-Hill Cos unit will center on the model used to rate the bonds and will be made in lawsuits to be filed as soon as this week, the newspaper said, citing the people.
A move by U.S. officials would be the first federal enforcement action against a major credit rating agency over alleged illegal behavior tied to the financial crisis.
Several state attorneys general are expected to join the case, the newspaper said.
McGraw-Hill and the U.S. Department of Justice were not immediately available for comment.
Shares of McGraw-Hill traded as much as 2.6 percent lower following news of the possible charges. In afternoon trading, they were down $1.21, or 2.1 percent, at $57.13.
S&P and its main rivals, Moody's Corp's Moody's Investors Service and Fimalac SA's Fitch Ratings, have long faced criticism from investors, politicians and regulators for assigning high ratings to thousands of subprime and other mortgage securities that quickly turned sour.
In a variety of lawsuits brought by investors, S&P has maintained that its ratings constitute opinions protected by the 1st Amendment to the U.S. Constitution. (Reporting by Jonathan Stempel in New York; Editing by Steve Orlofsky)
Standard & Poor's says it will face Justice Dept suit over subprime ratings - Feb. 4, 2013
S&P To Face Charges From States, U.S. Over Wrongdoing Before Financial Crisis: Report
this probably makes the most sense for the first round of charges....what are the coli's thoughts??? what outlets will you be checking as your sources for the case???
