Standard & Poor’s will be allowed to see government documents relating to the U.S. Justice Department’s decision last year to sue the rating company and not its competitors for issuing allegedly fraudulent ratings.
Credit-rating companies routinely award higher rankings to debt issued by banks and corporations that pay them the most, a conflict of interest that may escape Congressional efforts to change the way they do business.
Shareholders in U.S.-listed companies can thank Standard & Poor’s for making them $1 trillion poorer after the rating firm earlier this month lowered the grade on Treasury securities for the first time to AA+ from AAA. Now, some of the most experienced investors say the stock market losses make no sense.
Standard & Poor’s Financial Services LLC and its parent, McGraw Hill Financial Inc., were sued by New Jersey for allegedly failing to give objective ratings to mortgage-backed securities, the state’s attorney general said.
San Francisco lawyer John Keker, the Vietnam War platoon leader who later prosecuted Oliver North and represented clients from Eldridge Cleaver to Lance Armstrong, may deploy his “slashing and smashing” approach to defend Standard & Poor’s Financial Services LLC.