Tags: S&P | US | Lawsuit | Downgrade

S&P Calls US Lawsuit 'Retaliation' for Downgrade

Tuesday, 03 Sep 2013 04:26 PM

McGraw Hill Financial Inc.’s Standard & Poor’s unit called the $5 billion fraud lawsuit filed against it by the federal government “retaliation” for the ratings company’s downgrade of U.S. creditworthiness.

S&P said the government brought “selective, punitive and meritless litigation” after the company exercised “free speech rights with respect to the creditworthiness of the United States of America,” according to a filing Tuesday in federal court in Santa Ana, California, responding to the government lawsuit filed in February.

“Only S&P Ratings downgraded the United States and only S&P Ratings has been sued by the United States, even though the S&P ratings challenged by the United States were no different than those of at least one other rating agency and other rating agencies have made the same assertions of ‘independence’ that are challenged in the complaint as against S&P,” John Keker, an attorney for the New York-based firm, said in the filing.

The Justice Department is seeking as much as $5 billion in civil penalties for losses to federally insured financial institutions that relied on S&P’s investment-grade ratings for mortgage-backed securities and collateralized debt obligations.

Tracy Schmaler, a spokeswoman for the Justice Department, didn’t immediately respond to an e-mail seeking comment on the filing today.

In August 2011, S&P downgraded the U.S.’s 60-year-running AAA credit rating to AA+ with a negative outlook.

U.S. Attorney General Eric Holder said Feb. 5, the day after the complaint was filed against S&P, that it was unrelated to the downgrade.

The case is U.S. v. McGraw-Hill Cos., 13-cv-00779 U.S. District Court, Central District of California (Santa Ana).

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McGraw Hill Financial's Standard & Poor's unit called the $5 billion fraud lawsuit filed against it by the federal government "retaliation" for the ratings company's downgrade of U.S. creditworthiness.
S&P,US,Lawsuit,Downgrade
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2013-26-03
Tuesday, 03 Sep 2013 04:26 PM
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