NEW YORK (Reuters) - Connecticut Attorney General Richard Blumenthal said on Wednesday his office is suing the three leading credit rating agencies, saying they intentionally gave lower ratings to bonds issued by municipalities that drove up costs for taxpayers.
Blumenthal said the lawsuit named Moody’s Corp, McGraw-Hill Cos Inc’s Standard & Poor’s ratings unit and Fimalac SA’s Fitch ratings service as defendants.
The lawsuit accuses the firms of giving municipalities artificially low credit ratings. As a result, Blumenthal said, towns, school districts, and sewer and water districts have been forced to spend taxpayer dollars to purchase bond insurance to improve their ratings, or pay higher interest costs on their lower-rated bonds.
Reporting by Martha Graybow; editing by Jeffrey Benkoe