US accuses Standard & Poor's of fraudulently issuing high ratings to risky mortgage bonds - InfoNews

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US accuses Standard & Poor's of fraudulently issuing high ratings to risky mortgage bonds

FILE - This Oct. 9, 2011 file photo shows 55 Water Street, home of Standard & Poor's, in New York. S&P said Monday, Feb. 4, 2013, the U.S. government is expected to file civil charges against Standard & Poor's Ratings Services, alleging that it improperly gave high ratings to mortgage debt that later plunged in value and helped fuel the 2008 financial crisis. The charges would mark the first enforcement action the government has taken against a major rating agency involving the worst financial crisis since the Great Depression. (AP Photo/Henny Ray Abrams, File)
February 05, 2013 - 4:43 AM

WASHINGTON - The U.S. government is accusing the debt rating agency Standard & Poor's of civil fraud for giving high ratings to risky mortgage bonds that helped bring about the financial crisis.

The government said in a complaint filed late Monday that S&P misled investors by stating that its ratings were objective and "uninfluenced by any conflicts of interest." It said S&P's desire to make money and gain market share caused S&P to ignore the risks posed by the investments between September 2004 and October 2007.

The alleged fraud made it possible to sell the investments to banks. The government charged S&P under a law aimed at making sure banks invest safely.

S&P has denied wrongdoing. S&P is a unit of McGraw-Hill Cos. Inc.

News from © The Associated Press, 2013
The Associated Press

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