California filed a suit against Wall Street’s largest credit rating agency Standard & Poor’s charging it with violating the False Claims Act by using “magic numbers” and guesses” to inflate ratings which cost the California public pension funds over $1 billion. The suit comes a day after federal prosecutors filed against the bond rating agency alleging that S & P gave top ratings to the troubled mortgage backed securities which failed miserably triggering the nation’s financial crisis. California is seeking $4 billion in damages. S&P is a unit of McGraw Hill which has publicly stated that it will vigorously defend against the “warrantless” claims. The documents filed in court in California allege that investors relied upon the S&P ratings as the bog investors have only general descriptions of the mortgages and other investments backing these securities. The suit also alleges that S&P misrepresented to the state pension funds that its ratings were not influenced by economic interests and instead the company lowered its standards in order to make money and suppressed efforts to develop more accurate models. Jeffrey Newman represents whistleblowers.