The U.S. Justice Department is preparing to file a civil suit against Standard & Poor’s Financial Services LLC for its positive reviews of collateralized debt obligations in advance of the financial collapse, the ratings firm announced on February 4.
The suit would be the first by the federal government against one of the ratings agencies since the crisis hit. According to Standard & Poor’s, a subsidiary of McGraw-Hill Companies Inc., the Justice Department’s civil division is looking at claims associated with its ratings in 2007 of collateralized debt obligations. The Securities and Exchange Commission has said that it was also considering taking legal action against Standard & Poor’s.
