Colorado Follows Suit, Files Against S&P
Colorado is joining at least a dozen other states in filing a lawsuit against credit rating agency Standard & Poor’s.
Colorado Attorney General John Suthers has filed a lawsuit alleging that Standard & Poor's inflated its ratings on risky mortgage investments that helped trigger the 2008 financial crisis.
Suthers alleges the credit rating agency put its own financial interests above its self-described objectivity. In a release, he said those actions were a significant factor in the meltdown driven by the subprime mortgage crisis:
“Our complaint alleges that in order to protect their dominant market share, S&P executives compromised their objectivity and independence when rating these securities. Yet, S&P continues to assure the public of their complete objectivity and independence. We allege that this activity is in violation of the Colorado Consumer Protection Act.”
The suit, filed Tuesday in Denver District Court suit seeks unspecified civil penalties and damages.
The U.S. government filed a $5 billion civil suit against S&P in federal court, also Tuesday. It claimed the agency gave high marks to mortgage-backed securities in order to earn business from banks that issued the investments. S&P says the lawsuit is without merit.