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.
REUTERS
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Banking & Finance
UK listings shake-up alone won't transform London IPO market, say analysts
MAS issues 5-year prohibition order against ex-DBS representative for dishonest conduct
JPMorgan raises 2024 interest income forecast to US$91 billion
Deutsche Bank lifts S&P 500 year-end target to Street-high of 5,500
China’s capital outflow surges to highest since 2016 in April
SoftBank plans 550 billion yen bond in Japan, adding to jumbo deals