DOJ Brings Civil Fraud Action Against S&P

more+
less-

On February 4, the Department of Justice filed a complaint in the Central District of California against two Standard & Poor’s entities in connection with credit ratings S&P provided for certain RMBS and CDOs. The government asserts claims under the 1989 Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), which allows the government to bring civil claims for mail fraud, wire fraud, and “financial institution fraud” for alleged frauds perpetrated against federally insured financial institutions. The complaint alleges that from September 2004 through October 2007, S&P knowingly issued inflated ratings of non-prime RMBS and CDOs, delayed downgrading those products, and knowingly used faulty ratings methodology. The government seeks statutory civil penalties totaling over $5 billion. Complaint.

Topics:  Credit Ratings, DOJ, FIRREA, Fraud, Rating Agencies, Ratings, RMBS, S&P

Published In: Criminal Law Updates, Finance & Banking Updates, Insurance Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Orrick - Structured Finance Group | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »