EnduringSense

“The price of apathy towards public affairs is to be ruled by evil men.” Plato

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S&P to be Sued by US Over Bond Ratings

Posted by Steve Markowitz on February 20, 2013

The New York Times reported that the US Justice Department will file a civil suit against Standard & Poor’s Rating Service.  According to the report, the Justice Department claims that S&P fraudulently rated mortgage bonds that played a role in creating the financial meltdown of 2008.  The Justice Department indicated it will seek in excess of $1 billion in damages.

In submitting this story, a Blog reader said:

“Let’s see if I’ve got this right: The banks that made the bad loans got bailed out and no bankers went to jail.  But, now the government now wants to put the rating agency on the hook for $1 billion.  In other words, failure to report a crime is worse than committing the crime itself.  Makes sense to me!”

To the comment above this Blog adds that when it comes to government, logic is irrelevant.  Is it possible that the US government is threatening S&P to keep it from downgrading US debt in the future?

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