Feb 4 Federal and state prosecutors intend to
bring civil charges against Standard & Poor's for wrongdoing in
its rating of mortgage bonds prior to the 2008 financial crisis,
The Wall Street Journal said on Monday, citing people familiar
with the matter.
Allegations against the McGraw-Hill Cos unit will
center on the model used to rate the bonds and will be made in
lawsuits to be filed as soon as this week, the newspaper said,
citing the people.
A move by U.S. officials would be the first federal
enforcement action against a major credit rating agency over
alleged illegal behavior tied to the financial crisis.
Several state attorneys general are expected to join the
case, the newspaper said.
McGraw-Hill and the U.S. Department of Justice were not
immediately available for comment.
Shares of McGraw-Hill traded as much as 2.6 percent lower
following news of the possible charges. In afternoon trading,
they were down $1.21, or 2.1 percent, at $57.13.
S&P and its main rivals, Moody's Corp's Moody's
Investors Service and Fimalac SA's Fitch Ratings, have
long faced criticism from investors, politicians and regulators
for assigning high ratings to thousands of subprime and other
mortgage securities that quickly turned sour.
In a variety of lawsuits brought by investors, S&P has
maintained that its ratings constitute opinions protected by the
1st Amendment to the U.S. Constitution.
(Reporting by Jonathan Stempel in New York; Editing by Steve