NEWSMAX: …The New York Times reported Monday: “The Justice Department plans to file civil fraud charges against the nation’s largest credit-ratings agency, Standard & Poor’s, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck.”
The paper said the suit could be filed within days and blamed the agency for bestowing high credit ratings to bundled mortgage securities, making them appear safer than they actually were for investors.
Before the housing crisis, financial experts had argued that the collateralized debt instruments were actually safer for investors, because they divided a single mortgage among multiple debt instruments, seemingly lowering the risk to investors who purchased any one instrument… (more)
