For Immediate Release
Media Contact: Kriss Bivens Cloyd
(208) 334-4119

Date: February 3, 2015

Idaho Attorney General Joins in $1.3 billion Multistate Settlement with Standard & Poor’s

(Boise) – Attorney General Lawrence Wasden says Idaho has resolved its lawsuit with Standard & Poor’s Financial Services (S&P), resulting in one of the largest cash settlements ever obtained under the state’s Consumer Protection Act.

Under settlement terms announced today, Idaho will receive $21.5 million. Overall, S&P will pay $1.375 billion to 20 states and the U.S. Department of Justice to end litigation alleging the credit rating company engaged in false, deceptive and misleading practices in the run-up to – and even after – the financial crisis that began in 2008. The settlement is expected to wipe out S&P’s operating profit for one year.

“I am pleased to have resolved this important enforcement action,” Wasden said. “This settlement holds S&P accountable for its misrepresentations and sends a strong message that no company, no matter the size, is above the law.”

Wasden filed his complaint against S&P – the world’s largest credit rating firm for financial instruments – in February 2013. The complaint focused on S&P’s systematic engagement in acts and practices related to its credit rating business that were misleading, false and deceptive to consumers, starting in 2001 and continuing through 2011.

“For years, S&P made statements emphasizing the independence and objectivity of its rating services,” Wasden said. “These statements were made to investors, regulators, Congress and the public. My lawsuit alleged that these statements were not true.”

“In our view, S&P catered to clients who selected credit rating agencies, in part, on those willing to offer the best rating for the securities the clients were offering. Ultimately, instead of providing independent and objective ratings, S&P manipulated its analytical models to produce the credit ratings its clients desired,” Wasden said.

The alleged misconduct stretched into 2011, Wasden said, citing the Security and Exchange Commission’s recent decision to suspend S&P’s license to rate certain mortgage-backed securities. Click here for additional information.

The agreement also requires S&P to comply with all applicable state laws, including Idaho’s Consumer Protection Act. The company has also agreed to a statement of facts acknowledging conduct related to its analysis of structured finance securities.

The $21.5 million settlement is the largest against a single defendant for the Office of Attorney General outside of the tobacco settlement.

Other states involved in the litigation include: Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Illinois, Indiana, Iowa, Maine, Mississippi, Missouri, New Jersey, North Carolina, Pennsylvania, South Carolina, Tennessee, Washington and the District of Columbia.

NOTE TO READERS - This settlement information has expired and is no longer available.

- End -

News by Year: