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.
If you are a victim of securities fraud, financial malpractice or broker theft by a FINRA registered broker please call the securities attorneys of The Costello Law Group at (877) 418-0003 for a free consultation.