U.S. confident its $5 billion S&P lawsuit was not retaliation

Mon Aug 25, 2014 5:18pm EDT
 
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By Jonathan Stempel

(Reuters) - The United States, which is suing Standard & Poor's for $5 billion over its credit ratings, said on Monday it is confident that documents the rating agency wants for its defense will not show that the lawsuit was filed in retaliation for a downgrade of the country's debt.

In a filing with the U.S. District Court in Santa Ana, California, the U.S. Department of Justice said S&P's "general suspicions" do not justify the rating agency's request for the release of dozens of unredacted documents, including materials from former Treasury Secretary Timothy Geithner.

The Justice Department said it has submitted documents sought by S&P to U.S. District Judge David Carter, and is "confident" that his review will prove they "do not support the defendants' allegations of retaliation in any way."

Indeed, the Justice Department added in a footnote, "The United States believes that the redacted information in certain of these documents would affirmatively rebut S&P's claims."

Other material was redacted because it was privileged or irrelevant, the government said.

Catherine Mathis, an S&P spokeswoman, declined to comment. A hearing is set for Sept. 9.

S&P, a unit of New York-based McGraw Hill Financial Inc, has said the government singled it out for a lawsuit after it took away the United States' "triple-A" rating on Aug. 5, 2011.

The $5 billion lawsuit filed in February 2013 accused S&P of issuing inflated ratings before the 2008 financial crisis to win more fees from issuers, and failing to downgrade debt backed by mortgage-backed securities fast enough.   Continued...

 
A view shows the Standard & Poor's building in New York's financial district February 5, 2013.  REUTERS/Brendan McDermid