The Illinois Attorney General has filed a lawsuit against Standard & Poor’s, claiming that the agency gave fraudulently high ratings to risky mortgage-backed investments in the years prior to the 2008 housing market crash, according to the Chicago Sun-Times.
Attorney General Lisa Madigan filed the suit last week in the Cook County Circuit Court. The suit alleges that S&P “compromised its independence” by giving its highest ratings to “unworthy, risky investments as a corporate strategy to increase its revenue and market share,” said the attorney general’s office in a written announcement of the suit, according to the Sun-Times.
The suit alleges S&P “ignored the increasing risks posed by mortgage-backed securities” and instead assigned ratings that were favorable to its client base and its own profits, the statement said.
In response to the suit, Standard & Poor’s spokesman David Wargin said: “This case is without merit and we will defend ourselves vigorously.”
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