On behalf of Costello Law Groupof
The United States attorneygeneral, Eric H. Holder, Jr., joined by attorneys general from 16 states, brought suit against Standard & Poor’s (S&P) and its parent company, the McGraw-Hill Companies, for “knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud”. The government’s claim seeks $5 billion in penalties to cover losses to state pension funds and federally insured banks and credit unions.
Initially the government sought to fine S&P and the McGraw-Hill Companies in excess of $1 billion and at least one count of fraud. When S&P refused the governments offer the government responded by bringing suit under a 1989 banking law that is intended to protect taxpayers from financial institutions that are federally funded. Prior Court rulings have found that questionable ratings are not considered opinions, but misrepresentations.