U.S. confident its $5 billion S&P lawsuit was not retaliation
The United States, which is suing Standard & Poor’s for $5 billion over its credit ratings, said on Monday it is confident that documents the rating agency wants for its defense will not show that the lawsuit was filed in retaliation for a downgrade of the country’s debt.
The U.S. Department of Justice said S&P’s “general suspicions” do not justify the rating agency’s request for the release of dozens of unredacted documents, including materials from former Treasury Secretary Timothy Geithner.
The Justice Department added in a footnote, “The United States believes that the redacted information in certain of these documents would affirmatively rebut S&P’s claims.”
Catherine Mathis, an S&P spokeswoman, declined to comment. A hearing is set for Sept. 9.
S&P, a unit of New York-based McGraw Hill Financial Inc, has said the government singled it out for a lawsuit after it took away the United States’ “triple-A” rating on Aug. 5, 2011.
The $5 billion lawsuit filed in February 2013 accused S&P of issuing inflated ratings before the 2008 financial crisis to win more fees from issuers, and failing to downgrade debt backed by mortgage-backed securities fast enough.
S&P has said its ratings are opinions protected by the U.S. Constitution’s First Amendment. It is represented by Floyd Abrams, a leading First Amendment specialist.
The case is U.S. v. McGraw-Hill Cos et al, U.S. District Court, Central District of California, No. 13-00779.
Source: Reuters
