U.S. Justice Department sues S&P (as reported by various authors via bloomberg.com)

The Government’s lawsuit against McGraw-Hill’s S&P unit hinges on the argument the banks were unknowing investors and were duped by the rating that S&P placed on their credit products. The government is seeking $5bn and an admission of wrongdoing in connection with what it alleges as deliberately understating the risk of $2.8 trillion in residential MBOs and $1.2 trillion in CDOs rated by the Firm between Sept ’04-Oct ’07. A wide range of articles on the topic can be found here.

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