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Lisa Madigan sues S&P over high ratings on risky mortgages
Sam Hudzik | Jan. 25, 2012
Illinois' attorney general is suing the credit ratings giant Standard and Poor's. Lisa Madigan said the company let profits drive the ratings it gave risky investments.
LAWSUIT: Read it (PDF)
Madigan alleges Standard & Poor's engaged in "unfair, deceptive and illegal business practice(s)" when it assigned credit ratings to those evil-doers of the economic collapse: residential mortgage backed securities and collateralized debt obligations.
The suits claims S&P "allowed its...desire for profits and fear of losing investment bank clients to taint the integrity of its supposedly independent credit analysis." As a result, Madigan said investors bought those products believing they were a safer bet than they really were.
The complaint was filed in Cook County court on Wednesday.
It quotes from internal S&P emails, including one in which an employee writes about the CDO market, "Let's hope we are all wealthy and retired by the time this house of cards falters."
A spokesman for S&P, David Wargen, said Wednesday afternoon, "The case is without merit and we will defend ourselves vigorously."
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Comments
A seemingly small issue in Rockford exposes a statewide problem that Lisa Madigan, Pat Quinn, Mike Madigan, and John Cullerton have been working very hard to hide from the public to keep the banking industry happy. Every so often, someone is forced to give up their PIN and ATM card and then killed so the killer can clean out their bank account. Data from the Rockford PD shows that somewhere between 3 and 6% of all murders in Illinois involved this crime pattern. That’s 22 to 44 murders in 2010. In order to protect the ATM business model, they’ve even blocked legislation that would expose the problem and help catch the individual killers. Pat Quinn or Lisa Madigan could simply order the state police to disclose the data, but they won’t. As the matter is exposed in other states, people will start asking how it could have gone like this for so long, and the only conclusion is pretty ugly. http://rockrivertimes.com/2011/11/30/guest-column-forced-atm-withdrawal-...
Lisa, I admire your guts. Risky course of action, but worth a try. Go out there and win one for the people.
Rating agencies (S@P and others) mortgage companies and big banks contributed to the recent financial catastrophe. It is a really good idea for Lisa Madigan and other state attorney generals to hold these entities accountable. It would be great if the Federal government would do the same.
Yet another Please-Look-At-Me-I'll-Be Running-For-Governor-In-A-Few-Years stunt from Lisa Madigan.
How many more stunts does she have? Plenty, partner. Definitely her father's daughter. Prediction: this
is the last you'll hear of this "case without merit" until Lisa Madigan starts her run for Gov when it will be
one more talking point - and this Attorney General is pretty much all talk - for her well-funded campaign.