Standard & Poor’s reached a $125 million lawsuit settlement with the largest U.S. state pension fund over inflated ratings on residential-mortgage bond deals, Bloomberg News reported yesterday. S&P will pay the California Public Employees Retirement System (CalPERS) to resolve claims over grades on subprime mortgages during the run-up to the 2008 financial crisis. In multiple accords including the CalPERS deal that will be announced today, S&P and parent McGraw Hill Financial Inc. will pay $1.5 billion in total to resolve similar allegations from the U.S. Justice Department and more than a dozen states. California will receive $210 million as part of S&P’s settlement with the Justice Department and attorneys general of 19 states and the District of Columbia, one of the people said. That sum is separate from S&P’s $125 million agreement with CalPERS.
