{"id":5463,"date":"2013-07-04T00:00:00","date_gmt":"2013-07-04T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2013\/07\/district_judge_not_inclined_to"},"modified":"2022-05-19T13:43:16","modified_gmt":"2022-05-19T18:43:16","slug":"district-judge-not-inclined-to","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/district-judge-not-inclined-to\/","title":{"rendered":"District Judge Not Inclined to Toss $5B Securities Fraud Case Against Standard &#038; Poor\u2019s"},"content":{"rendered":"<p>A U.S. district judge in California has put out a tentative decision in the $5B fraud lawsuit against Standard &amp; Poor\u2019s indicating that he will likely reject a motion to dismiss the civil case against the credit rating agency. Judge David Carter said he needs more time to come up with his final ruling, which is expected on July 15, but for now, he is turning down S &amp; P\u2019s request to toss out the case outright.<\/p>\n<p>Federal prosecutors sued S &amp; P contending that the credit rater chose not to alert investors that the housing market was failing in \u201806 and inflated high-risk mortgage investments\u2019 ratings. The Obama Administration said the ratings agency did not act fast enough to put downgrade a large number of subprime-backed securities despite realizing that home prices were dropping and borrowers were finding it hard to pay back loans. Instead, collateralized debt obligations and mortgage-backed securities continued to receive elevated ratings from the top credit rating agencies, allowing banks to sell trillions of these investments.<\/p>\n<p>Contending that the credit rater committed fraud by making false claims that its ratings were objective, the US Department of Justice wants S &amp; P to pay $5 billion in penalties, The government believes that between 9\/04 and 10\/07, S &amp; P delayed updating both its ratings criteria and analytical models, which means the requirements were weaker than what analysts say should have been necessary to ensure their accuracy. During this time, S &amp; P credit rated about $1.2 trillion in structured products related to $2.8 trillion worth of mortgage securities and charged up to $750 per rated deal. The government says that this means that S &amp; P saw the investment banks that put out the securities as its primary customers.<\/p>\n<div class=\"read_more_link\"><a href=\"https:\/\/www.investorlawyers.com\/blog\/district-judge-not-inclined-to\/\"  title=\"Continue Reading District Judge Not Inclined to Toss $5B Securities Fraud Case Against Standard &#038; Poor\u2019s\" class=\"more-link\">Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>A U.S. district judge in California has put out a tentative decision in the $5B fraud lawsuit against Standard &amp; Poor\u2019s indicating that he will likely reject a motion to dismiss the civil case against the credit rating agency. Judge David Carter said he needs more time to come up with his final ruling, which [&hellip;]<\/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":[3845,3883],"tags":[],"class_list":["post-5463","post","type-post","status-publish","format-standard","hentry","category-credit-rating-agencies","category-standard-and-poors"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>District Judge Not Inclined to Toss $5B Securities Fraud Case Against Standard &amp; Poor\u2019s &#8212; Investor Lawyers Blog &#8212; July 4, 2013<\/title>\n<meta name=\"description\" content=\"A U.S. district judge in California has put out a tentative decision in the $5B fraud lawsuit against Standard &amp; Poor\u2019s indicating that he will likely &#8212; July 4, 2013\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/district-judge-not-inclined-to\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"District Judge Not Inclined to Toss $5B Securities Fraud Case Against Standard &amp; Poor\u2019s &#8212; Investor Lawyers Blog &#8212; July 4, 2013\" \/>\n<meta name=\"twitter:description\" content=\"A U.S. district judge in California has put out a tentative decision in the $5B fraud lawsuit against Standard &amp; Poor\u2019s indicating that he will likely &#8212; July 4, 2013\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Shepherd Smith Edwards &amp; Kantas, LLP\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"District Judge Not Inclined to Toss $5B Securities Fraud Case Against Standard & Poor\u2019s &#8212; 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