WASHINGTON – Standard & Poor's is close to a $1.37 billion settlement with the Obama administration and U.S. states over allegations it knowingly inflated its ratings of risky mortgage investments that helped trigger the financial crisis.
A person familiar with the matter said Wednesday that the credit rating agency is expected to sign an agreement to settle with the Justice Department and about 20 state attorneys general. The person spoke on condition of anonymity because the settlement isn't yet finalized and hasn't been announced.
The settlement would resolve civil charges filed nearly two years ago accusing S&P of failing to warn investors that the housing market was collapsing in 2006 because doing so would hurt its ratings business.
New York-based S&P, a division of McGraw-Hill Cos., had no immediate comment.