Call Us 919-240-4054Attorneys for Standard and Poor’s Rating Services asked a California judge to dismiss a lawsuit against the company alleging violations of the False Claims Act. The suit, filed by California Attorney General Kamala Harris in February, was among more than a dozen filed against S&P’s in approximately fifteen states, all accusing the group of intentionally overinflating its rating of structured finance securities. North Carolina’s Attorney General Roy Cooper announced his complaint against S&P’s the same day as Harris and a dozen other states made their announcements and just 24 hours after the United States Justice Department revealed they were suing the agency.
The Justice Department is alleging that the agency lied to consumers about its credit ratings being free of conflicts of interest in an effort to increase business rather than convey accurate ratings. Both the Justice Department’s and the state’s complaints accuse S&P’s of being motivated by greed rather than the desire to provide objective ratings of available mortgage-backed securities and collateralized debt.
S&P’s representatives have said that the company issued the same ratings as other investment rating agencies and that its actions do not constitute a violation of the False Claims Act because the government’s evidence does not know the agency actually knew their ratings were “false” or did not believe the ratings they were giving.
The Justice Department began investigating S&P’s rating practices in 2009.