ElNono
02-04-2015, 02:35 AM
Nearly a decade after credit ratings agencies became a symbol of a financial crisis they helped create, one of the industry’s biggest players faces a costly reckoning.
Standard & Poor’s, a ratings agency accused of inflating its assessment of mortgage investments that spurred the 2008 crisis, announced on Tuesday that it had agreed to pay $1.37 billion to settle civil charges from the Justice Department and from 19 state attorneys general and the District of Columbia.
The settlement, which does not require judicial approval, signals that the investigation of crisis-era misdeeds has entered a final stage.
...
But in a statement of facts with the settlement, the company acknowledged that “the voluminous discovery provided to S.&P. by the United States to date” does not “support its allegation” that the Justice Department acted out of spite. S.&P. agreed to withdraw that allegation.
That about-face was one of many compromises that ultimately paved the way to a settlement. Just as S.&P.’s retracting the claims of retaliation was a must-have for the Justice Department, S.&P. refused to admit to wrongdoing. Ultimately, the government conceded that fight.
...
S.&P.’s decision to fight the Justice Department’s case caught Wall Street and Washington by surprise. Nearly every financial institution that faces a Justice Department lawsuit eventually settles.
Such outcomes — $1 billion is now a floor, not a ceiling for a settlement — have led Wall Street lawyers to criticize what they call a government shakedown. And yet, some lawmakers complain that the civil lawsuits are a slap on the wrist for companies that helped ignite the worst financial crisis since the Great Depression. Not one top executive at S.&P., or any major Wall Street firm, was charged criminally for the misdeeds during the era.
http://dealbook.nytimes.com/2015/02/03/s-p-announces-1-37-billion-settlement-with-prosecutors/?hpw
Standard & Poor’s, a ratings agency accused of inflating its assessment of mortgage investments that spurred the 2008 crisis, announced on Tuesday that it had agreed to pay $1.37 billion to settle civil charges from the Justice Department and from 19 state attorneys general and the District of Columbia.
The settlement, which does not require judicial approval, signals that the investigation of crisis-era misdeeds has entered a final stage.
...
But in a statement of facts with the settlement, the company acknowledged that “the voluminous discovery provided to S.&P. by the United States to date” does not “support its allegation” that the Justice Department acted out of spite. S.&P. agreed to withdraw that allegation.
That about-face was one of many compromises that ultimately paved the way to a settlement. Just as S.&P.’s retracting the claims of retaliation was a must-have for the Justice Department, S.&P. refused to admit to wrongdoing. Ultimately, the government conceded that fight.
...
S.&P.’s decision to fight the Justice Department’s case caught Wall Street and Washington by surprise. Nearly every financial institution that faces a Justice Department lawsuit eventually settles.
Such outcomes — $1 billion is now a floor, not a ceiling for a settlement — have led Wall Street lawyers to criticize what they call a government shakedown. And yet, some lawmakers complain that the civil lawsuits are a slap on the wrist for companies that helped ignite the worst financial crisis since the Great Depression. Not one top executive at S.&P., or any major Wall Street firm, was charged criminally for the misdeeds during the era.
http://dealbook.nytimes.com/2015/02/03/s-p-announces-1-37-billion-settlement-with-prosecutors/?hpw