The Justice Department is investigating whether credit ratings agency Standard & Poor’s improperly rated dozens of mortgage securities leading up to the financial crisis, the New York Times reported. The inquiry began before S&P downgraded the U.S. credit rating this month.
Specifically, the department has been looking into instances in which the company’s analysts wanted to award lower mortgage bond ratings but were overruled by S&P business managers, the Times said.
“[We have] received several requests from different government agencies over the last few years,” said Ed Sweeney, a spokesperson for S&P. We continue to cooperate with these requests. We do not prevent such agencies from speaking with current or former employees.”
S&P and other ratings agencies reported record profits during the economic boom, awarding their highest-ever ratings on bundles of troubled loans. [NYT]