February 3, 2015

Ratings Agency giant Standard & Poor’s Financial Services (S&P), along with its parent corporation McGraw Hill Financial Inc., agreed to pay $1.375B to settle charges it schemed to defraud investors in structured financial products known as Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDOs). According to the government, S&P falsely represented that its ratings of RMBS and CDOs were objective, independent and uninfluenced by S&P’s business relationships with the investment banks that issued the securities. Instead, S&P issued inflated ratings that misrepresented the securities’ true credit risks causing RMBS and CDO investors to incur substantial losses. Whistleblower Insider

Tagged in: Financial and Investment Fraud, Housing and Mortgage Fraud, Securities Fraud,