S&P investigated for mortgage securities ratings
Standard & Poor’s Headquarters in Lower Manhattan, New York City (Photo: Wikimedia Commons)
Story from The Takeaway. Listen to audio above for full report.
The decisions of one rating agency can cause a lot of economic volatility. But according to an exclusive piece from The New York Times Thursday morning, the Justice Department is opening an investigation into Standard & Poor’s to see if the agency improperly rated dozens of mortgage securities leading up to the financial crisis.
The ratings being investigated came long before the downgrade of the U.S. credit rating, but the probe does raise new questions about the credibility of the nation’s largest credit agency and their secretive rating process.
Louise Story, Wall Street and finance reporter for The New York Times, broke the story.
“What the [Department of Justic] is looking at is whether the ratings process had some kind of fraud or wrongdoing in which the ratings analysts got bossed around by the business people at S&P,’ she told The Takeaway.
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