As widely expected, Standard & Poor’s Financial Services and its parent McGraw Hill Financial Inc. finally made peace with the U.S. Department of Justice and nearly two dozen state attorneys general on Tuesday, agreeing to pay $1.37 billion to settle civil claims that they schemed to defraud investors with inflated ratings for residential mortgage-backed securities and collateralized debt obligations.
It’s a big settlement that gives each side the right to claim some moral victory. The government got S&P to drop allegations that the DOJ’s 2-year-old case was retaliation for S&P downgrading U.S. debt in 2011. S&P, meanwhile, managed to avoid technically admitting any wrongdoing, although the negotiated statement of facts filed with the settlement cites some pretty damning evidence.
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