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S&P may pay US$1.5b over mortgage ratings: source
[NEW YORK] Standard and Poor's is in talks to pay as much as US$1.5 billion to settle US government lawsuits over mortgage ratings issued in the run-up to the 2008 financial crisis, a person familiar with the matter said on Tuesday.
The settlement of civil fraud litigation may be reached as soon as this month, two people familiar with the matter said.
S&P, a unit of McGraw Hill Financial Inc, is trying to resolve lawsuits filed by the US Department of Justice and more than a dozen states that accused it of inflating credit ratings to win more business from issuers.
It had previously been expected to pay slightly more than US$1 billion to settle, another person familiar with the matter told Reuters last week. The final amount could fluctuate as more states sign on, that person said.
In a civil fraud lawsuit filed in February 2013, the Justice Department claimed that investors lost billions of dollars after buying mortgage-backed debt whose risks had been misrepresented by S&P.
The government said insured institutions had suffered more than US$5 billion in losses, and sought to recoup that amount from S&P.