(WASHINGTON) -- More than five years after the recession, credit rating agencies may finally face some legal fallout for actions that led to the financial crisis.
Credit rating agencies gave stellar ratings to mortgage bonds that led to the near collapse of the global financial system. Thanks to these ratings the bonds were bought and sold by banks with great confidence.
It turned out many of those bonds were worthless, and taxpayers had to spend billions to bail out institutions that were trading them. Meanwhile, the ratings agencies made huge profits for the “service” they provided the financial system.
Now Standard & Poor’s, one of the three major U.S. credit rating agencies, will be facing the Justice Department in civil charges. The department has come under criticism for not being able to bring criminal cases since the financial meltdown.
S&P put out a statement saying, “a DOJ lawsuit would be entirely without factual or legal merit.”
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