LOS ANGELES - (Mealey's) The U.S. government on Feb. 5 announced the
filing of a lawsuit in California federal court against Standard & Poor's
Ratings Services alleging that the ratings agency lied about its objectivity
and independence and issued inflated ratings on certain structured debt
securities (United States of America v. McGraw-Hill Companies Inc., et al.,
No. 13-0779, C.D. Calif.).
The government filed the lawsuit in the U.S. District
Court for the Central District of California, naming McGraw-Hill Cos. Inc. and
subsidiary Standard & Poor's Financial Services LLC (collectively, S&P)
The government alleges that from September 2004 to
October 2007, S&P "knowingly and with the intent to defraud, devised, participated
in, and executed a scheme to defraud investors in RMBS [residential
mortgage-backed securities] and CDO [collateralized debt obligation] tranches,
including federally insured financial institutions, as to material matters, and
to obtain money from these investors by means of material false and fraudulent
pretenses, representations, and promises, and the concealment of material
The government states claims for mail fraud, wire fraud
and financial institution fraud under the Financial Institution Reform,
Recovery and Enforcement Act.
The government is represented by Stuart F. Delery, Maam
Ewusi-Mensah Frimpong, Michael S. Blume, Arthur R. Goldberg, James T. Nelson,
Bradley Cohen, Jennie Kneedler, Sondra L. Mills and Thomas D. Zimpleman of the
Department of Justice in Washington, D.C., and U.S. Attorney Andre Birotte Jr.
and Assistant U.S. Attorneys George S. Cardona, Leon W. Weidman, Anoril
Khorshid and Richard E. Robinson in Los Angeles.
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