More mortgage migraines
By Judy Martel · Bankrate.com
Friday, February 8, 2013
Posted: 6 pm ET
Accusations of wrongdoing during the housing crisis are not going away anytime soon. On Tuesday, Attorney General Eric Holder announced that the U.S. government is bringing a civil lawsuit for more than $5 billion against Standard & Poor’s over mortgage bond ratings.
Expectations of the lawsuit caused shares of McGraw-Hill, Standard & Poor’s parent company, to experience its biggest one-day percentage drop since 1987 on Monday. The stock fell 13.8 percent, according to CNBC.
Holder is charging that Standard & Poor’s misled investors with its bond ratings and ignored questions raised by analysts. This is the first federal charge against a ratings agency, but investors apparently believe it might not be the last. According to CNBC, shares of another ratings agency, Moody’s, dropped 10.7 percent Monday on news of the suit against Standard & Poor’s.
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