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Civil fraud suit against S&P looks set to go ahead
A $5 billion civil fraud suit against Standard & Poor's looks likely to proceed despite attempts by the company to get the proceedings stopped.
S&P manipulated likelihood of housing market
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Confirmation is expected shortly from US District Judge David Carter, who heard the case for dropping the case, earlier this week in California, according to Bloomberg Businessweek. He has given a tentative ruling that he will reject the dismissal request. His fuller ruling is due to be given by Monday, July 15 at the latest. A lawsuit was filed against the credit ratings agency earlier this year by the federal government, accusing S&P of giving overly optimistic ratings on mortgage investments and of not warning investors about the likelihood of a collapse in the housing market. S&P asked for the case to be dismissed on the grounds that the allegations are too broad and unspecific to sustain fraud allegations.
Heavily criticised
The role of credit ratings agencies has been heavily criticised in Europe as well. But the US has set a precedent in launching proceedings against those who could be deemed somewhat responsible among the credit ratings agencies for the economic downturn.
