The U.S. government may proceed with its $5 billion lawsuit accusing Standard & Poor’s of misleading investors by inflating its credit ratings, after a federal judge rejected the rating agency’s effort to dismiss the civil fraud case. See previous BIIA coverage.
In a written decision late on Tuesday, the judge said the government could pursue claims that S&P manipulated ratings to boost profit, and in doing so, concealed credit risks and conflicts of interest. This led to large losses for investors and contributed to the 2008 financial crisis, the government contended.
Catherine Mathis, an S&P spokeswoman, said on Wednesday the lawsuit lacks merit: “We firmly believe S&P’s ratings were and are independent and expect to show just that in court,”