Iowa is among a dozen states that
have joined a federal civil fraud suit against credit-ratings agency Standard
lawsuit filed in Polk County District Court, is part of a
coordinated civil law enforcement effort by a bipartisan group of state
attorneys general, the District of Columbia Attorney General, and the U.S.
Department of Justice. The Justice Department filed a federal lawsuit in U.S.
District Court for the Central District of California following an extensive
"We allege that S&P
misled investors and market participants, which includes Iowa consumers,"
Miller said in a release. "The company falsely promised that its
investment analyses were independent and objective. People relied on
these representations to make important financial decisions."
The Justice Department filed
civil fraud charges late on Monday against the nation's largest credit-ratings
agency and its parent company, McGraw-Hill Cos., accusing the firm of inflating
the ratings of mortgage investments and setting them up for a crash when the
financial crisis struck, The
New York Times reported.
The federal lawsuit alleges that
Standard & Poor's high ratings made many investments appear safer than they
actually were, and are now seen as having contributed to the financial crisis.
From September 2004 through
October 2007, Standard & Poor's "knowingly and with the intent
to defraud, devised, participated in, and executed a scheme to defraud
investors" in certain mortgage-related securities, the suit claims.
S&P also falsely represented that its ratings "were objective,
independent, uninfluenced by any conflicts of interest," the government
Standard & Poor's officials said in a
statement Monday that it had acted in good faith in issuing the ratings.