CHICAGO, Jan. 26 (LID) – Illinois Attorney General Lisa Madigan (D) filed a lawsuit against Standard & Poor's Ratings Services, alleging the company misrepresented the value of residential mortgage-backed securities (RMBS) sold to investors.
By assigning inflated ratings to risky mortgage-backed investments since at least 2001, Madigan said the credit-rating firm played an implicit role in the housing market meltdown.
Filed Wednesday in Cook County Circuit Court, the lawsuit alleges that S&P fraudulently assigned its highest rating of AAA to risky securities as part of a corporate strategy to increase revenues and market share.
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