The Department of Justice will have a tough time proving that Standard and Poors “inflated” its bond ratings.
The US Department of Justice has launched a civil law suit against the rating agency Standard & Poors, alleging “S&P issued inflated ratings that misrepresented the securities’ true credit risks” and that “S&P falsely represented that its ratings were objective, independent, and uninfluenced by S&P’s relationships with investment banks when, in actuality, S&P’s desire for [...]
In 2008, Collateralized Debt Obligations (CDO) that had been given very high ratings by the credit rating agencies collapsed. The rating agencies got blamed for faulty ratings. Once a mining association gave a coal mine the “Safest Mine Award.” One month later the mine blew up and killed 32 miners. The award is based on [...]
An AAA rating is not “wrong” because the security later defaults.