LOS ANGELES, California, CMC – The United States Department of Justice has filed a civil fraud lawsuit against one of the world’s larger credit-ratings agencies that services several Caribbean Community (CARICOM) member states.
On Monday, the department said it filed the suit in a US federal district court in which it accused the Wall Street-based Standard & Poor’s (S&P) of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis began.
Over the years, S&P, as well as other Wall Street-based credit rating firms, such as Moody’s and Finch, has rated the economies of most CARICOM countries, such as Jamaica, Trinidad and Tobago, Barbados, the Bahamas, Belize and Suriname.
In Monday’s suit, the US accused S&P and its parent company, McGraw-Hill Companies, of “knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors” in certain mortgage-related securities from September 2004 to October 2007.
The suit also charges that S&P falsely stated that its ratings “were objective, independent, uninfluenced by any conflicts of interest.”
