Schneiderman’s office is investigating whether the ratings agency followed its own methodology in rating mortgage bonds, according to a Bloomberg report. And the New York attorney general’s office isn’t the only government office going after the agency.
S&P said in July that it had received a notice from the Securities and Exchange Commission that its enforcement staff intended to recommend pursuing civil charges against the company. The potential lawsuit would be over six ratings S&P issued for commercial mortgage-backed securities in 2011, according to a CNBC report.
“S&P has been cooperating with the commission in this matter and intends to continue to do so,” the company said in a statement.
The Justice Department is also suing
the ratings agency for giving inflated ratings to mortgage bonds it knew to be subpar. According to the DOJ and other government agencies, the company gave the inflated ratings to bonds sold by big banks in order to earn their business. S&P, meanwhile, contends the government is suing merely in retaliation for the agency's 2011 downgrade of the United States credit rating.
Standard & Poor’s is in hot water over its ratings of mortgage bonds again, this time with New York Attorney General Eric Schneiderman.