NEW YORK—Standard & Poor’s, the ratings agency that has frequently been charged with inflating its assessment of mortgage investments that in turn spurred the 2008 crisis, has agreed to pay $1.37 billion to settle civil charges from the Justice Department and from 19 state attorneys general and the District of Columbia. The settlement, which does not require judicial approval, signals that the investigation of crisis-era misdeeds has entered a final stage, according to authorities.
Credit unions were some of the biggest losers in investments in mortgage-backed securities, including losses that led to the failure of several large corporate credit unions. NCUA continues to pursue a number of Wall Street banks seeking settlements related to MBS.
The New York Times reported that the S&P settlement, on the heels of banks and other financial institutions collectively paying more than $40 billion to end federal and state investigations, was among the government’s few remaining items of unfinished business from the crisis. No other ratings agency has faced a Justice Department lawsuit, though prosecutors continue to investigate actions by Moody’s.
“The settlement we have reached today not only makes clear that this kind of conduct will never be tolerated by the Department of Justice, it also underscores our strong and ongoing commitment to pursue any company or entity that violated the law and contributed to the financial crisis of 2008,” Attorney General Eric H. Holder, Jr. said at a news conference on Tuesday.
In a released statement Standard & Poor’s said that “after careful consideration, the company determined that entering into the settlement agreement is in the best interests of the company and its shareholders.” The ratings agency also disclosed that it had separately agreed to pay the California Public Employees’ Retirement System, the large pension fund, $125 million to resolve certain claims.