S&P argues Fed lawsuit "retaliation" for credit rating downgrade

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Standard & Poor's (S&P) court filing said that the lawsuit filed by the US Justice Department against the credit ratings agency was an act of retaliation. The Justice Department filed a case in February against S&P for not giving the right ratings to the mortgage securities from 2004 to 2007. The government agency also said the deceptive ratings allowed S&P to benefit from the companies whose risky home loans were pooled into securities by collecting fees from them.

The lawyers representing S & P's parent company McGraw Hill claimed the lawsuit was merely a retaliation for the downgrade of the US credit rating in 2011 from an AAA rating. The downgrade was marked as the first time that happened in credit rating history. S&P also said although rival firms Moody's and Fitch ratings to mortgage bonds were similar to what S&P did, both of them were not sued.

"Only S&P Ratings downgraded the United States and only S&P Ratings has been sued by the United States, even though the S&P ratings challenged by the United States were no different than those of at least one other rating agency," said one of S&P's lawyers in the filing.

The Justice Department, who held a news conference at the same time the countersuit was filed, denied that the suit it had filed has a connection with the credit rating downgrade. However, it did not provide comment whether it would be pursuing other credit agencies like S&P.

Tags
Standard and Poor's, US Justice Department

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