McGraw-Hill , the parent company of Standard & Poor's Ratings Services, has spoken out in defense of its subsidiary from the claims made in a $5 billion fraud lawsuit brought by the Department of Justice last week. McGraw-Hill didn't hold back, saying it believes the lawsuit is "entirely without factual or legal merit" and that it plans to defend itself vigorously against the litigation.
The statement from McGraw-Hill said that its rating agency, between February and July of 2007, downgraded "more underlying U.S. RMBS than any other rating agency." RMBSes are residential mortgage-backed securities, and they played a role in the financial crisis that was to follow in the coming years. The DOJ lawsuit alleges that S&P had knowingly issued inflated ratings to RMBSes and collateralized debt obligations that were rife with toxic mortgages, thereby defrauding investors that included government institutions.
The article McGraw-Hill Criticizes DOJ S&P Lawsuit originally appeared on Fool.com.
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