Standard & Poor’s (S&P) has agreed to pay US$1.5 billion to settle charges over its ratings on mortgage securities that soured in the lead up to the 2008 financial crisis.
S&P parent McGraw Hill Financial Inc announced that it will pay US$687.5 million to the US Department of Justice, and US$687.5 million to 19 states and the District of Columbia, which had filed similar lawsuits over the ratings, Reuters reported Tuesday.
The settlement comes after more than two years of litigation as S&P tried to beat back allegations that it issued overly rosy ratings in order to win more business.
Late Monday, the company reached a separate US$125 million settlement with public pension fund California Public Employees’ Retirement System, which had sued S&P in 2009, claiming its inaccurate ratings caused the firm hundreds of millions of dollars in losses, the report said.
US authorities sued S&P in 2013 after initial settlement talks broke down, seeking US$5 billion and accusing the ratings agency of defrauding investors.
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