{"id":5457,"date":"2013-04-24T00:00:00","date_gmt":"2013-04-24T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2013\/04\/standard_poors_wants_dojs_mort"},"modified":"2022-05-04T13:51:54","modified_gmt":"2022-05-04T18:51:54","slug":"standard-poors-wants-dojs-mort","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/standard-poors-wants-dojs-mort\/","title":{"rendered":"Standard Poors Wants DOJ\u2019s Mortgage Debt Lawsuit Against It Tossed"},"content":{"rendered":"\n

Standard Poors is asking a judge to dismiss the US Justice Department\u2019s securities lawsuit <\/a>against it. The government claims that the largest ratings agency defrauded investors when it put out excellent ratings for some poor quality complex mortgage packages, including collateralized debt obligations, residential mortgage-backed securities, and subprime mortgage-backed securities, between 2004 and 2007. The ratings agency, however, claims that the DOJ has no case.<\/p>\n

Per the government\u2019s securities complaint, financial institutions lost over $5 billion on 33 CDOs because they trusted S & P\u2019s ratings and invested in the complex debt instruments. The DOJ believes that the credit rater issued its inaccurate ratings on purpose, raising investor demand and prices until the latter crashed, triggering the global economic crisis. It argues that certain ratings were inflated based on conflicts of interest that involved making the banks that packaged the mortgage securities happy as opposed to issuing independent, objective ratings that investors could rely on.<\/p>\n

Now, S & P is claiming that the government\u2019s lawsuit overreaches in targeting it and fails to show that the credit rater knew what the more accurate ratings should have been, which it contends would be necessary for there to be grounds for this CDO lawsuit. In a brief submitted to the United States District Court for the Central District of California, in Los Angeles, S & P\u2019s lawyers argue that there is no way that their client, the Treasury, the Federal Reserve, or other market participants could have predicted how severe the financial meltdown would be. <\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

Standard Poors is asking a judge to dismiss the US Justice Department\u2019s securities lawsuit against it. The government claims that the largest ratings agency defrauded investors when it put out excellent ratings for some poor quality complex mortgage packages, including collateralized debt obligations, residential mortgage-backed securities, and subprime mortgage-backed securities, between 2004 and 2007. The […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3742,3845,4001,3757],"tags":[2557],"class_list":["post-5457","post","type-post","status-publish","format-standard","hentry","category-collateralized-debt-obligation","category-credit-rating-agencies","category-mortgage-fraud","category-mortgagebacked-securities","tag-rmbs"],"yoast_head":"\nStandard Poors Wants DOJ\u2019s Mortgage Debt Lawsuit Against It Tossed — Investor Lawyers Blog — April 24, 2013<\/title>\n<meta name=\"description\" content=\"Standard Poors is asking a judge to dismiss the US Justice Department\u2019s securities lawsuit against it. 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