The Justice Department sued Standard & Poor's Ratings Services yesterday alleging that the firm ignored its own standards to rate mortgage bonds that imploded in the financial crisis and cost investors billions, the Wall Street Journal reported today. The civil charges by U.S. Attorney General Eric Holder against the New York-based company, one of the bond-rating industry's three giants, is the first federal enforcement action against a credit-rating firm over the crisis. The two sides have discussed a possible settlement for about four months, but S&P balked over concerns that a deal could sink the company. The government is seeking penalties of more than $1 billion, which would be the biggest sanction imposed on a firm related for its actions in the crisis. Several state attorneys general are likely to join in the suit.
