Federal and State Government May Sue S&P Over Financial Crisis

What's Hot


5 Reasons to Shop for a Home in DecemberFamily

Shoppers Boycott Businesses Selling Trump-Branded ProductsBusiness

15 Things You Should Always Buy at a Dollar StoreMore

Giving Thanks: Why Foreigners Find America AmazingAround The House

New Email Phishing Scam Targets Amazon ShoppersMore

50 Best Gifts Under $25 for Everyone on Your ListFamily

Why Washing Your Turkey Can Make You IllFamily

Pay $2 and Get Unlimited Wendy’s Frosty Treats in 2017Family

The 7 Worst Things to Buy at a Dollar StoreMore

What the Richest 1 Percent Earns in Every StateFamily

10 Ways to Retire Earlier Than Friends on the Same SalaryGrow

The 10 Best Ways to Blow Your MoneyCredit & Debt

The 50 Hottest Toys of the Past 50 YearsFamily

30 Awesome Things to Do in RetirementCollege

Will there finally be some accountability for the meltdown now more than four years old?

A Wall Street Journal report says prosecutors are preparing to file lawsuits against the credit rating agency Standard and Poors, arguing S&P played an allegedly illegal role in the 2008 financial meltdown.

The charges are coming now because of a “breakdown” in private settlement talks after lengthy investigations, according to the article. It would be the first federal enforcement action against a credit-rating firm over the crisis. (That sure took a while, didn’t it?) Congress has been criticizing the agency and its rivals, Moody’s and Fitch, for years because they were supposedly giving subprime-mortgage assets too-good ratings.

There’s no word yet on why S&P was singled out, or any of the key details of the suit. (Although S&P was the first big credit agency to downgrade America’s debt, it’s presumably not a revenge thing.)   These probably won’t be available until it’s filed and prosecutors speak publicly. But we can get an idea of what this is about from a 2011 Financial Crisis Inquiry Commission report, which in part says this…

The mortgage-related securities at the heart of the crisis could not have been marketed and sold without [credit-rating agencies’] seal of approval. Investors relied on them, often blindly. In some cases, they were obligated to use them, or regulatory capital standards were hinged on them. This crisis could not have happened without the rating agencies.

We also have an idea of how S&P will argue the case: in the past, the firm has said its ratings are protected as free-speech opinions by the First Amendment. Sometimes that’s worked with judges, and sometimes it hasn’t. Time will tell what happens here.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: Missed HBO’s ‘Westworld’? Here’s How to Watch it, Along With Everything on HBO, Free

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,695 more deals!