Standard & Poor’s will pay more than $58 million to settle charges of fraudulent misconduct in rating mortgage bonds, the U.S. Securities and Exchange Commission said on Wednesday. S&P will also pay $19 million to settle cases filed by attorneys general in New York and Massachusetts. The total is $77 Million.
The SEC case alleges wrongdoing concerning S&P to the ratings on certain commercial mortgage-backed securities, or CMBS. One order relates to misrepresentations about which criteria S&P used when rating certain deals. A second relates to what the commission called a “false and misleading article” about new criteria rolled out in 2012. The third comes from internal control failures in the monitoring of already rated residential mortgage bonds.
Separately, the SEC said it would initiate a case against an S&P executive for allegedly fraudulently misrepresenting how S&P calculated some ratings criteria.
Jeffrey Newman represents whistleblowers