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Could the S&P Lawsuit on Actions Before Financial Crisis Be Revenge for Credit Downgrade?

Feb. 6, 2013 9:05pm Christopher Santarelli

Before the bottom fell out on our economy back in 2007 – credit rating groups like S&P and Moody’s were giving positive investor ratings to the mortgage backed securities largely blamed for the collapse that we are still recovering from years later. In 2011, S&P was the only credit rating agency to downgrade the rating of the United States after the debt limit crisis of that summer. This week the Department of Justice filed a civil suit against S&P for the company’s role in incorrectly characterizing the safety of mortgage backed securities. S&P, noticing the absence of its fellow negligent agencies in the suit, has suggested that perhaps their persecution is motivated by retribution for the downgrade–which the Obama administration had immediately questioned in 2011.

S&P’s attorney Floyd Abrams tells the Wall Street Journal that “things seemed to rev up in terms of the intensity” of the federal investigation of S&P’s mortgage backed securities ratings after the downgrade of the U.S. credit.

On ‘Real News’ Tuesday the panel discussed the timeline leading up to the S&P lawsuit and how likely (or unlikely) it is that the Obama administration is using the DOJ for vengeance.

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Comments (8)

battles
Posted on February 7, 2013 at 8:29am
What do you expect from a government that has become a criminal enterprise.

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media-bias-steals-elections
Posted on February 7, 2013 at 3:22am
It’s called the right to assemble, the right to assemble an opinion against another organization?

It’s a civil right to down grade the credit rating of the United States of America? Whether that opinion is correct or not, other organizations are entitled to that opinion, in order to produce a valued service? If that service is accepted with value in the market place, then yes, a lawsuit would be perceived as an act of revenge by those who validate the the opinion independent of those who want to dispute it?

Time will tell?

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- naughtycal
  Posted on February 7, 2013 at 8:45am
  who’s responsible for the economic collapses a credit rating company or federal regulations requiring high risk mortgages be made to get FDIC protection. It’s a no brainer….in that our representative have no brains.
  
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deiernhart8
Posted on February 7, 2013 at 1:55am
No I do not think its revenge. I think that Obama knows the the US is facing another down grade and they filed this because they will use it as a spin. They know its coming and by beating them to a headline they then can say, when S&P down grades us, they only down graded us because our goverment and that way Obama can place the blame back too them. Same ole stunts!

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Levinisgod
Posted on February 7, 2013 at 1:02am
So I guess S&P will be sued twice by Obama. Once for the financial crisis of 2007 and then again when the dollar collapses in the very near future. This is such a dangerous regime we have ruling our country. This type of strong arm tactics being used on S & P is something I would expect from a dictator. Any person or company that speaks the truth about our imminent societal collapsed will pay a price.

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Heather Cocolin
Posted on February 7, 2013 at 12:43am
No. Not for revenge, but a preemptive strike. S&P has been discussing a further downgrade for months. With the S&P tied up in a legal battle they will not be able to do any up or down grading so as not to be in violation of the ongoing court battle. It is a very smart move by Obama. Too bad.

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ALL4FREEDOM
Posted on February 7, 2013 at 12:39am
Of course it is retaliation for the downgrade. If I were on the S&P legal team, I’d subpoena Barney Frank to testify that there was NOTHING WRONG WHATSOEVER with the mortgage markets. After all, he said so himself, over and over. I’d love to see that weasel try to lie his way out of it while under oath since the SOB helped engineer the crisis himself.

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kturn16
Posted on February 7, 2013 at 12:36am
duh, yah it’s revenge…that’s how Oblamo operates. First thing I thought of when I began to see the headlines on the story.

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