S&P Early Victory in U.S. Fraud Suit Seen as Unlikely

McGraw-Hill Cos.’s Standard & Poor’s unit is set to take its first stab at fending off the U.S. Justice Department’s allegations that the company’s mortgage-backed securities ratings were fraudulent.

The largest U.S. rating company by revenue faces a deadline today to file its response in federal court in Santa Ana, California. Justice Department officials said when the complaint was filed in February that S&P could face more than $5 billion in civil penalties based on losses by federally insured financial institutions that relied on S&P’s ratings.