Articles Posted in S & P settles improper rating case

Standard & Poor’s, the nation’s largest rating firm will pay $1.5 billion to resolve a series of lawsuits by the government over its ratings on mortgage securities that impacted  the 2008 financial crisis.In a 119-page complaint, the government said S&P delayed updates to its ratings criteria and analytical models between September 2004 and October 2007, weakening its criteria in a desire to gain more business from the investment banks that issued the securities.

The settlement comes after more than two years of litigation as S&P fought allegations it issued improperly favorable ratings in order to win more business.

S&P parent McGraw Hill Financial Inc (MHFI.N) said it will pay $687.5 million to the U.S. Department of Justice, and $687.5 million to 19 states and the District of Columbia, which had filed similar lawsuits over the ratings.