S.&P.’s $1.37 Billion Reckoning Over Crisis-Era Misdeeds

S.&’s $1.37 Billion Reckoning Over Crisis-Era Misdeeds
By Ben Protess
February 3, 2015 8:40 am February 3, 2015 8:40 am


Updated, 9:39 p.m. | 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.

The S.&P. settlement, on the heels of banks and other financial institutions collectively paying more than $40 billion to end federal and state investigations, was among the government’s few remaining items of unfinished business from the crisis. No other ratings agency has faced a Justice Department lawsuit, though prosecutors continue to investigate actions by Moody’s.

“The settlement we have reached today not only makes clear that this kind of conduct will never be tolerated by the Department of Justice, it also underscores our strong and ongoing commitment to pursue any company or entity that violated the law and contributed to the financial crisis of 2008,” Attorney General Eric H. Holder Jr. said at a news conference on Tuesday.

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