Attorney General Eric Holder Jr., standing with a team of state attorneys general, on February 5 announced a civil suit against credit ratings agency Standard & Poor’s that alleges the company defrauded investors between 2004 and 2007, misrepresenting the soundness of products that were at the heart of the financial crisis. One by one in Washington, the federal and state officials took turns chiding S&P’s alleged misconduct, saying the company lied to investors and manipulated ratings in a scheme to boost profit. The officials alleged that as early as 2003, analysts at S&P were raising warnings about the accuracy of the company’s rating system. "Put simply, this alleged conduct is egregious—and it goes to the very heart of the recent financial crisis," Holder said at a news conference at the U.S. Justice Department. The civil suit, which alleges more than $5 billion in losses, was filed February 4 in U.S. District Court for the Central District of California. S&P parent company McGraw-Hill is also named as a defendant in the 119-page complaint. Tony West, the acting associate attorney general at DOJ, said at the news conference that S&P promised "objective and independent" ratings for residential mortgage-backed securities and collateralized debt obligations. "But the evidence we have uncovered tells a different story," West said. West said S&P, for instance, knew it was going to downgrade the ratings on a certain class of mortgage bonds but did not take any action to adjust the ratings to reflect that inevitability. "It’s sort of like buying sausage from your favorite butcher, and he assures you the sausage was made fresh that morning and is safe," West said. "What he doesn’t tell you is that it was made with meat he knows is rotten and plans to throw out later that night." The federal suit marked the first against a ratings agency since the financial crisis. Sixteen states, including Connecticut, Delaware and California, in addition to the District of Columbia, are pursuing actions against S&P for alleged violations of state law. Holder said the government is "always open" to conversations with the lawyers representing S&P, a team that includes Floyd Abrams, a litigation partner in the New York office of Cahill Gordon & Reindel. S&P said in a statement Monday that "a DOJ lawsuit would be entirely without factual or legal merit." The company said it "deeply regrets" that its ratings for collateralized debt obligations "failed to fully anticipate the rapidly deteriorating conditions in the U.S. mortgage market" before the financial meltdown of 2008. More than two dozen Main Justice attorneys and lawyers with the U.S. attorney’s office in Los Angeles participated in the S&P investigation, DOJ officials said. The investigators said they served hundreds of civil subpoenas and interviewed more than 150 witnesses, including former S&P analysts and executives. The federal suit was filed under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 to seek penalties that equal the losses suffered by federally insured financial institutions. Under this law, DOJ said it can seek penalties for the violation of criminal law, including mail, wire and bank fraud. The burden of proof, however, remains a preponderance of the evidence. Stuart Delery, a top DOJ Civil Division lawyer, called the financial institutions reform law, enacted in the aftermath of the savings and loan scandal on the 1980 s, a "powerful weapon for combatting financial fraud." This article originally appeared in The National Law Journal.