Government Caves in S&P Fraud Suit: Wall Street Escape From Accountability Virtually Ensures More Wrongdoing, Another Financial Crash

WASHINGTON – Note: Today, the U.S. Department of Justice (DOJ) announced a settlement with Standard & Poor’s (S&P), which will pay $1.5 billion to resolve lawsuits over its mortgage securities ratings. The U.S. had sued S&P, accusing it of weakening its rating criteria to gain more business in the years before the 2008 financial crash. Below are statements from two Public Citizen experts.

Robert Weissman, president, Public Citizen:

“The job of credit ratings firms is to protect investors by providing accurate and independent analysis. The statement of facts in the S&P settlement shows not that the company made good-faith mistakes in the run-up to the financial crash, but that it compromised its independence and deceived investors. Yet today, S&P settles without even an admission that it violated the law, and with no prospect of subsequent criminal prosecution.

Is the public supposed to take solace in S&P agreeing to comply with state consumer protection laws and respond in good faith to requests for information from state enforcement agencies? The doctrine of too-big-to-jail is alive and well at the Department of Justice. The Wall Street escape from accountability virtually ensures a repeat of the widespread wrongdoing leading up to the financial crash.”

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