RegionsNorth AmericaStandard & Poor’s Parent Ready to Fight Government Lawsuit

Standard & Poor’s Parent Ready to Fight Government Lawsuit

The parent of Standard & Poor’s (S&P) said that it is ready to fight the
lawsuit
brought against the credit ratings agency (CRA) earlier this month by the US Department of Justice (DoJ) alleging that its reviews of mortgage-backed securities issued before 2008 were overly positive and helped trigger the financial crisis.

“Rest assured, we will vigorously defend against these erroneous claims,” said Harold McGraw III, president and chief executive officer (CEO) of McGraw-Hill, which owns S&P, on a call with analysts.

However, Ken Vittor, the group’s general counsel, commented: “If there is a reasonable settlement opportunity, we are open to discussing it.” Vittor added that although the group believes the charges are without merit, the case is likely to drag on for three years or more.

The call was scheduled to coincide with McGraw-Hill’s fourth-quarter earnings report, but executives spent much of it refuting the government’s allegations. They also expressed confidence that S&P’s credit rating business would continue to grow despite the lawsuit, as low interest rates were encouraging more companies to issue bonds while demand for ratings is robust in emerging markets such as India.

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