Colorado Sues S&P Over Pre-Crisis Mortgage Ratings
DENVER (AP) – Colorado has filed a lawsuit alleging that Standard & Poor’s inflated its ratings on risky mortgage investments that helped trigger the 2008 financial crisis.
Attorney General John Suthers alleged Tuesday that the credit rating agency put its financial interests above its self-described objectivity. The Denver District Court suit seeks unspecified civil penalties and damages.
The U.S. government filed a civil suit against S&P in federal court Tuesday. It claimed the agency gave high marks to mortgage-backed securities because it wanted to earn more business from the banks that issued the investments.
The federal government is seeking at least $5 billion in penalties. S&P says the lawsuit is without merit.
At least 12 other states filed lawsuits against Standard & Poor’s on Tuesday.
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