S&P’s Response To The DOJ’s Meritless Lawsuit
The U.S. Dept. of Justice and some states have filed meritless civil lawsuits against S&P challenging some of our 2007 CDO ratings and the underlying RMBS models. Their allegations are simply untrue. Our ratings were issued in good faith and were consistent with the views expressed in 2007 by the Treasury and the Federal Reserve.
S&P's inability, together with the Federal Reserve, Treasury, and other market participants, to predict the extent of the most catastrophic meltdown since the Great Depression reveals a lack of prescience, but not fraud.
The DOJ’s complaint makes numerous allegations that are entirely without merit. They are internally contradictory -- with emails cited that had no effect on the CDOs at issue -- and logically flawed (see “The DOJ Complaint Re S&P: The Facts” below).
The "In The Media" section includes third-party video and print media coverage of the case. The section labeled "S&P On Housing '06/'07" contains S&P reports published during 2006-2007 on the U.S. housing market and on U.S. residential mortgage-backed securities (RMBS), showing the good-faith work of S&P’s professionals. The fact is that S&P's ratings were based on the same subprime mortgage data available to the rest of the market – including U.S. Government officials who in 2007 publicly stated that problems in the subprime market appeared to be contained.