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S & P Colluded With Banks Leading to Economic Collapse, Prosecutors Allege

 
Uncle Fuck Stick
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07/09/2013 10:25 PM

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S & P Colluded With Banks Leading to Economic Collapse, Prosecutors Allege
[link to lakeforest-ca.patch.com]

federal judge in Santa Ana today tentatively ruled that prosecutors could continue with a $5 billion lawsuit alleging Standard & Poor's credit rating system fraudulently downplayed the risk in various securities, leading to the economic collapse of 2008.

U.S. District Judge David O. Carter said, however, he wanted to think about it some more and pledged to attorneys that he would -- a week from today - - finalize his ruling on Standard & Poor's motion to dismiss the lawsuit.

S&P's attorneys argued that the government's lawsuit was revenge for downgrading the nation's debt following the bruising debt-ceiling debate in 2011 that nearly led to the U.S. defaulting on its bills.

"So you think this is payback?" Carter asked attorney John Keker, who represents S&P.

"Yes," Keker replied while questioning why S&P's rival Moody's wasn't also sued.

Assistant U.S. Attorney George Cardona responded that Moody's has a different "set of models" for ratings.

Federal prosecutors also said they have been gathering evidence for three years in the lawsuit, which was filed in February, while S&P's attorneys argued the government's allegations of fraud were "generic" and overbroad.

Prosecutors argued that the financial industry recognized a conflict of interest going back to 2004 as S&P worked with banks and other lending institutions on how to rate complex securities such as collaterized bond obligations, or CBOs, which include a mix of risk, or collateralized debt obligations, or CDOs, which also include a range of debt and risk.

Those CDOs issued in 2007 included bundles of subprime mortgages.

S&P, prosecutors argue, issued a "code of conduct" that promised independent and unbiased ratings that investors depended upon. The company falsely promised the analysis would be separate from the business side, Cardona alleged.

"Our allegation is they all
Useless Cookie Eater

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07/09/2013 10:29 PM

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Re: S & P Colluded With Banks Leading to Economic Collapse, Prosecutors Allege
Doesn't make much sense.


Moody's
Standard and Poor's
Fitch Ratings

......ALL PLAYED AN EQUAL ROLE in fudging the rated risk level of the derivatives.


Which....by the way......NONE OF WHICH HAS BEEN FIXED AT ALL and a NEW bubble is now being inflated.


grtdep

Last Edited by Useless Cookie Eater on 07/09/2013 10:30 PM
Uncle Fuck Stick (OP)
WAKE THE FUCK UP !!!!!!!!

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07/09/2013 10:32 PM

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Re: S & P Colluded With Banks Leading to Economic Collapse, Prosecutors Allege
Doesn't make much sense.


Moody's
Standard and Poor's
Fitch Ratings

......ALL PLAYED AN EQUAL ROLE in fudging the rated risk level of the derivatives.


Which....by the way......NONE OF WHICH HAS BEEN FIXED AT ALL and a NEW bubble is now being inflated.


grtdep
 Quoting: Useless Cookie Eater


munch
Uncle Fuck Stick (OP)
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07/09/2013 11:59 PM

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Re: S & P Colluded With Banks Leading to Economic Collapse, Prosecutors Allege
bump
Anonymous Coward
User ID: 43142307
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07/10/2013 08:47 AM
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Re: S & P Colluded With Banks Leading to Economic Collapse, Prosecutors Allege
bump

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