| SANTA ANA, CALIFORNIA, July 29
SANTA ANA, CALIFORNIA, July 29 A trial on the
U.S. government's $5 billion lawsuit against Standard & Poor's
over the company's ratings of mortgage bonds prior to the 2008
financial crisis could begin in September 2015 and last four
months, the federal judge overseeing the case said on Tuesday.
A trial against S&P, a unit of McGraw Hill Financial Inc
, could ideally be wrapped up before the 2015 holiday
season, Judge David Carter, of U.S. District Court for the
Central District of California, said at a hearing. He declined
to set a firm starting date.
The length of the trial and the millions of pages of
documents needed for it reflect the challenges facing S&P, the
largest U.S. credit rating agency, as it defends against
lawsuits alleging it placed its own financial interests ahead of
those of investors.
Last year, the U.S. Department of Justice and many states
accused S&P of fraudulently representing that its ratings on
structured finance securities were objective and not tainted by
conflicts of interest.
In June, S&P suffered a setback when another federal judge
ruled that it must defend separately against similar lawsuits by
16 U.S. states and Washington, D.C. ; on Tuesday
S&P said it is now doing so.
Two weeks ago, The Wall Street Journal reported that S&P was
open to paying $1 billion to resolve the federal lawsuit, citing
people familiar with the matter.
That issue was not addressed at Tuesday's hearing, where S&P
and its investment banking clients argued over who would foot
the bill for the documents that the banks would need to produce
for the government's case.
A lawyer for Bank of America Corp's Countrywide unit
said the bank anticipated having to produce 100 million pages of
documents, while a lawyer for Citigroup Inc said that bank
has already turned over 16.5 million pages.
The paperwork has gotten so expansive that a lawyer for
Deutsche Bank AG said the German lender had sent
millions of pages of documents to India and other countries for
workers there to conduct an initial review.
"Are you saying that citizens of another country are
reviewing American citizens' banking records?" Carter said,
prompting laughter in the courtroom.
The Deutsche Bank lawyer responded that the outsourcing
(Reporting by Dana Feldman in Santa Ana, California; Writing by
Aruna Viswanatha and Jonathan Stempel; Editing by Leslie Adler)