Illinois Attorney General Lisa Madigan has filed a lawsuit against Standard & Poor's (S&P) for what she alleges is the rating agency's ‘fraudulent role in assigning its highest ratings to risky mortgage-backed investments in the years leading up to the housing market crash.’
In her lawsuit, filed in Cook County Circuit Court, Madigan claims that S&P intentionally ignored the risks when awarding out high ratings to unworthy investments, adding that the ratings agency was more interested in building market share and revenue.
‘Publicly, S&P took every opportunity to proclaim their analyses and ratings as independent, objective and free from its desire for revenue,’ Madigan says. ‘Yet privately, S&P abandoned its principles and instead used every trick possible to give deals high ratings in order to retain clients and generate revenue. The mortgage-backed securities that helped our market soar – and ultimately crash – could not have been purchased by most investors without S&P's seal of approval.’