Daily News: January 14, 2015

S&P Said Near $1B RMBS/CDO Settlement with U.S.

Bloomberg reported, citing a person familiar with the matter, Standard & Poor’s is close to a settlement of about $1 billion with the U.S. for allegedly misleading investors about its ratings of mortgage-backed securities before the subprime crisis.

Bloomberg notes, according to the complaint, S&P issued credit ratings on more than $2.8 trillion of residential mortgage-backed securities and about $1.2 trillion of collateralized-debt obligations from September 2004 to October 2007, according to the complaint.

Bloomberg said the government has said it might seek as much as $5 billion in civil penalties for losses by federally insured financial institutions that relied on the company’s investment-grade ratings for mortgage-backed securities and collateralized-debt obligations.

Previously on abfjournal: WSJ: S&P Accuses U.S. of Suing to Avenge Ratings Drop, September 4, 2013

To read the Bloomberg article, click here.