Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

S&P Calls U.S. Lawsuit ‘Retaliation’ for U.S. Downgrade

Sept. 3 (Bloomberg) -- McGraw Hill Financial Inc.’s Standard & Poor’s unit called the $5 billion fraud lawsuit filed against it by the federal government “retaliation” for the ratings company’s downgrade of U.S. creditworthiness.

S&P said the government brought “selective, punitive and meritless litigation” after the company exercised “free speech rights with respect to the creditworthiness of the United States of America,” according to a filing today in federal court in Santa Ana, California, responding to the government lawsuit.

“Only S&P Ratings downgraded the United States and only S&P Ratings has been sued by the United States, even though the S&P ratings challenged by the United States were no different than those of at least one other rating agency and other rating agencies have made the same assertions of ‘independence’ that are challenged in the complaint as against S&P,” John Keker, an attorney for the New York-based firm, said in the filing.

The Justice Department is seeking as much as $5 billion in civil penalties for losses to federally insured financial institutions that relied on S&P’s investment-grade ratings for mortgage-backed securities and collateralized debt obligations.

In August 2011, S&P downgraded the U.S.’s 60-year-running AAA credit rating to AA+ with a negative outlook.

Adora Andy Jenkins, a Justice Department spokeswoman, responded to questions about today’s filing by citing a transcript from the Feb. 5 press conference announcing the case, where Associate Attorney General Tony West said there was “no connection” to the downgrade.

“We looked at the facts, the law, and the investigation that these great prosecutors and civil lawyers put together and made a determination that the filing of these lawsuits was appropriate, but they are not in any way connected,” West, the No. 3 official at the department, said at the time.

The case is U.S. v. McGraw-Hill Cos., 13-cv-00779 U.S. District Court, Central District of California (Santa Ana).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.