US govt files lawsuit against S&P over mortgage 'rate-rigging'

In its first ever federal enforcement action against a credit rating agency related to the financial crisis, the US government has filed a lawsuit against Standard & Poor's for allegedly rigging mortgage bond rates.

The government said in a court statement it was initiating a civil law suit against the ratings agency and its parent company for setting inappropriately high mortgage rates prior to the financial crisis. It said the legal action was initiated because "considerations regarding fees, market share, profits, and relationships with issuers improperly influenced S&P's rating criteria and models". Talks between the Justice Department and S&P reportedly began last week as the government sought a settlement of more than $1bn (£635m), according to the New York Times. The news caused shares ...