WASHINGTON (OfficialWire) — The U.S. government is accusing the debt rating agency Standard &Poor’s of fraud for giving high ratings to risky mortgage bonds that helped bring about the financial crisis.
The government said in a civil 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 charges mark the first enforcement action the government has taken against a major rating agency involving the worst financial crisis since the Great Depression.
According to the government filing in U.S. District Court in Los Angeles,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.
Read More at OfficialWire . By Daniel Wagner.
Photo Credit:threecee (Creative Commons)