Feds Probing S&P Over Mortgages

The Justice Department is investigating whether business considerations trumped research at credit ratings giant Standard & Poor’s in the years leading up to the 2008 financial crisis, The New York Times reports. The federal probe on mortgage ratings, which may lead to a civil case, began before S&P’s recent controversial downgrade of the country’s sterling credit rating, according to the Times. The investigation is said to have “picked up speed” over the summer. After the financial crisis, ratings agencies including S&P, Moody’s and Fitch came in for criticism for having affixed top credit ratings to a host of toxic securities and for business models reliant on fees from banks who could shop for the most favorable treatment for their financial products. A successful case against the behemoth S&P could lead to a shift in how ratings are made, Reuters reports.

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