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FINALLY! The Feds finally look set to punish some of the financial sector wrong doing even if only in a tiny tangential way.
I'm sure they very worst case scenario is a slap on the wrist with no one going to jail but at least they've finally been made to make a token effort to punish corporate malfeasance which caused the bubble and crash. My guess this winds up as being nothing but window dressing and is settled out of court for a tiny symbolic "fine". We wouldn't want to upset the biggest lobbying group in Washington now would we?
My guess is it went something like "Boss, a handful of states appear like they're still going to try to do something to punish our fat cat banker friends for all their criminal acts. We've delayed them for five years and we've tried to talk them out of it so how about we pretend to go along with it just so we can water everything down and protect the bankers as much as possible?"
Reports: U.S. Plans To Sue S&P Over Mortgage Bonds Ratings
The United States and some states are planning to sue Standard & Poor's Ratings Services over what they say were the faulty ratings of mortgage bonds leading up to the 2008 financial collapse.
The Wall Street Journal broke the news citing "people familiar with the matter," and The New York York Times is pinning its reporting on S&P, which tells the newspaper it is expecting a lawsuit.
The Wall Street Journal explains:
S&P issued a statement saying a lawsuit from Justice, "would be entirely without factual or legal merit."
The New York Times reports that by bringing a civil suit as opposed to criminal suit, "the Justice Department's burden of proof will be less, perhaps lowering the bar for a successful prosecution."
The United States and some states are planning to sue Standard & Poor's Ratings Services over what they say were the faulty ratings of mortgage bonds leading up to the 2008 financial collapse.
The Wall Street Journal broke the news citing "people familiar with the matter," and The New York York Times is pinning its reporting on S&P, which tells the newspaper it is expecting a lawsuit.
The Wall Street Journal explains:
"The likely move by U.S. officials would be the first federal enforcement action against a credit-rating firm for alleged illegal behavior related to the crisis. Several state attorneys general are expected to join the case, making it one of the highest-profile and widest-ranging enforcement crisis-era crackdowns.
"The expected civil charges against S&P follow the breakdown of long-running settlement talks between the Justice Department and S&P, the people said.
"Many details of the looming enforcement action couldn't be immediately determined, such as why prosecutors are zeroing in on S&P rather than rivals Moody's Corp. and Fitch Ratings, a unit of Fimalac SA and Hearst Corp."
Update at 2:52 p.m. ET. Without 'Legal Merit':"The expected civil charges against S&P follow the breakdown of long-running settlement talks between the Justice Department and S&P, the people said.
"Many details of the looming enforcement action couldn't be immediately determined, such as why prosecutors are zeroing in on S&P rather than rivals Moody's Corp. and Fitch Ratings, a unit of Fimalac SA and Hearst Corp."
S&P issued a statement saying a lawsuit from Justice, "would be entirely without factual or legal merit."
The New York Times reports that by bringing a civil suit as opposed to criminal suit, "the Justice Department's burden of proof will be less, perhaps lowering the bar for a successful prosecution."
My guess is it went something like "Boss, a handful of states appear like they're still going to try to do something to punish our fat cat banker friends for all their criminal acts. We've delayed them for five years and we've tried to talk them out of it so how about we pretend to go along with it just so we can water everything down and protect the bankers as much as possible?"
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