Home Page | Photos | Video | Forum | Most Popular | Special Reports | Biz China Weekly
Make Us Your Home Page

S&P faces gov't lawsuit on ratings before financial crisis

English.news.cn   2013-02-05 09:04:12            

NEW YORK, Feb. 4 (Xinhua) -- The U.S. Department of Justice intends to file a civil lawsuit against the Standard & Poor' s Rating Services (S&P) on its rating in 2007 of certain U.S. collateralized debt obligations (CDOs), the company confirmed on Monday.

This is the first lawsuit against a credit rating agency over potential wrongdoings related to the sub-mortgage crisis enforced by the Department of Justice and it may be the start of future government's charges against rating agencies.

In a statement, the S&P said it has been informed by the department on the issue, adding that a lawsuit initiated by the Department of Justice would be "entirely without factual or legal merit."

The rating agency argued that the CDOs rated by S&P that the Justice Department cited to the company also independently received same ratings from other rating agencies.

It said that S&P "deeply regrets that our CDO ratings failed to fully anticipate the rapidly deteriorating conditions in the U.S. mortgage market during that tumultuous time" but "none of the primary market participants predicted the collapse including most banks, investment banks, rating agencies and regulators."

Share prices of McGraw-Hill, parent company of S&P, dropped 13.78 percent to settle at 50.30 U.S. dollars after Monday' s trading.

Editor: Wang Yuanyuan
Related News
Home >> Business            
Most Popular English Forum  
Top News  >>