Tue, 10 June
21.1 C
Yerevan
USD: 384.44 RUB: 4.83 EUR: 434.11 GEL: 140.51 GBP: 515.15

U.S. launches civil action against S&P over pre-crisis ratings

YEREVAN, February 5. /ARKA/. The U.S. government has launched a civil lawsuit against Standard & Poor’s and parent The McGraw-Hill Companies Inc over mortgage bond ratings, the first federal enforcement action against a credit rating agency over alleged illegal behavior tied to the recent financial crisis, Reuters reports.

The government said in a court filing it was seeking civil money penalties from S&P and McGraw Hill.

“Considerations regarding fees, market share, profits, and relationships with issuers improperly influenced S&P’s rating criteria and models,” the government said.

Shares of McGraw-Hill plunged 13.8 percent on Monday after the company said it was expecting the lawsuit, marking their biggest one-day percentage decline since the 1987 stock market crash, according to Reuters data.

The news also caused shares of Moody’s Corp, whose Moody’s Investors Service unit is S&P’s main rival, to slide 10.7 percent.

It is unclear why regulators may now be focusing on S&P rather than Moody’s or Fimalac SA’s Fitch Ratings.

S&P, Moody’s and Fitch have long faced criticism from investors, politicians and regulators for assigning high ratings to thousands of subprime and other mortgage securities that quickly turned sour.

“This lawsuit is significant because it could augur future government action or, even worse for the agencies, more litigation by investors,” said Jeffrey Manns, a law professor at George Washington University in Washington, D.C.

A civil case involves a lower burden of proof than a criminal case would, and could make it easier for investigators to uncover potential “smoking guns” through subpoenas, he added.
The New York Times reported that talks between the Justice Department and S&P broke down last week after the government sought a settlement of more than $1 billion.—0-

spot_img

POPULAR

Euro and ruble exchange rates to the Armenian dram fell, the dollar rose

The average market exchange rate of the US dollar to the Armenian dram, formed on the Armenian currency market as of June 6, 2025, increased by 0.06 points compared to June 5 and amounted to 383.46 drams.

Insurance market of Armenia is in embryonic state

Insurance market of Armenia is in embryonic state

Mechanism to stimulate cashless payments to be developed in Armenia

On Friday, the Armenian government held a meeting on issues related to stimulating cashless payments in the country.

Acba Bank contributed to the construction of a modern sports ground in Goris

In the “Haghtanak” park of Goris, a sports ground that meets modern standards was built in cooperation with Acba Bank, the Hayastan All-Armenian Fund and the Goris City Hall, the bank’s press service reported.

Acba Bank and NABU launch free 2025 program for organic agriculture development

Acba Bank and the Armenian branch of the German "Nature and Biodiversity Conservation Union" (NABU) are launching a free 2025 Organic Agriculture Development Program, the bank's press service reported.

LATEST NEWS

spot_imgspot_imgspot_img