WASHINGTON — The Washington blame game continues and the federal government has the credit ratings agency Standard and Poors (S&P) in its sight.
Reuters reports that a U.S. federal judge is allowing the federal government to proceed and to sue S&P for inflating credit ratings and thereby misleading investors. The case is a $5 billion civil fraud lawsuit against the credit ratings agency.
The lawsuit was not dismissed as S&P had hoped and focuses on how the agency was not objective in its ratings between the years of 2004-2007. The government says that they inflated ratings to gain more fees from issuers and bankers which pay for its ratings.
Meanwhile, S&P’s rivals of Moody’s and Fitch are not being sued.