CORRECTED-In lawsuit against S&P, a surprise appearance from Talking Heads
(Corrects spelling of David Byrne's last name)
NEW YORK Feb 5 (Reuters) - When the housing market was on the road to nowhere in 2007, one ratings analyst found an unlikely muse: the post-punk band Talking Heads.
The analyst wrote a parody of the rock group's 1983 hit, "Burning Down the House," and emailed it to friends. His version of the song ended up in a 128-page lawsuit that the U.S. Department of Justice filed against rating agency Standard & Poor's late Monday.
According to the lawsuit, the unidentified S&P analyst, known in the complaint as "Analyst D," later sent a video of himself singing and dancing to his song while coworkers watched and laughed.
His version of the song begins:
Housing market went softer
Strong market is now much weaker
Subprime is boiling over
Bringing down the house."
Shortly after sending around the email, the analyst told his colleagues not to forward the song, but added: "If you are interested, I can sing it in your cube ;-)."
In his initial email, the analyst offered his apologies to David Byrne, the Talking Heads lead songwriter and front man.
For McGraw-Hill Companies Inc, the parent company of the rating agency, the lawsuit is no laughing matter. The news that the government and several state attorney generals were going to sue S&P and McGraw-Hill over its alleged faulty rating of mortgage securities sent the company's stock down about 13.8 percent on Monday.
The U.S. government said that S&P's mortgage rating business was conflicted because it earned fees only when deals were sold, not if they were rejected. The ratings agency was also not quick enough to update it models and analysis to reflect the fact that the U.S. housing market was seriously weakening in early 2007, the government said.
"Considerations regarding fees, market share, profits, and relationships with issuers improperly influenced S&P's rating criteria and models," the government said in the civil complaint.
The government singled out about 30 collateralized debt obligations and other mortgage-backed securities that S&P rated in 2007, even as its own employees like Analyst D were noting the cracks in the foundation to the housing market.
It is not clear if federal prosecutors in Los Angeles plan to make the video of Analyst D available for public scrutiny. (Reporting by Matthew Goldstein; Editing by Dan Wilchins and Lisa Von Ahn)
- Protesters fell Lenin statue, tell Ukraine's president 'you're next'
- Four dead in apparent Connecticut murder-suicide
- South Korea expands air defense zone to partially overlap China's |
- Singer Susan Boyle reveals she has Asperger's syndrome: paper
- Dynasty's Congress party punished in Indian state elections