Judge Halts Illinois Ratings Suit Against S&P
From the Chicago Tribune
A lawsuit brought by the state of Illinois against the McGraw-Hill Cos. and its Standard & Poor's unit over allegedly misleading ratings given to residential mortgage-backed securities was halted by a U.S. judge.
U.S. District Judge Matthew Kennelly in Chicago on Wednesday stopped progress on the case filed last year by Illinois Attorney General Lisa Madigan, pending determination on whether it will be consolidated with similar cases filed by other states for pretrial proceedings.
"I'm going to grant the motion to stay," Kennelly told attorneys for both sides in court, granting the companies' request. The judge also directed the parties to submit papers addressing whether the case should be sent back to the state court where it was filed. The judge said he would rule on May 15.
Madigan sued S&P 14 months ago, alleging that it ignored the risks posed by the securities, and chose to curry favor with its clients, thus contributing to the 2008 U.S. economic downturn.
Connecticut sued in 2010; Mississippi, in 2011. The federal government sued the companies on Feb. 4, followed by states including California, Colorado, Missouri and Pennsylvania.
The businesses have denied the allegations, calling the cases a "hindsight-infused attempt by the states to lay blame with S&P for failing to predict the financial crisis."
Read more in our daily News Update...
From the Chicago Tribune
A lawsuit brought by the state of Illinois against the McGraw-Hill Cos. and its Standard & Poor's unit over allegedly misleading ratings given to residential mortgage-backed securities was halted by a U.S. judge.
U.S. District Judge Matthew Kennelly in Chicago on Wednesday stopped progress on the case filed last year by Illinois Attorney General Lisa Madigan, pending determination on whether it will be consolidated with similar cases filed by other states for pretrial proceedings.
"I'm going to grant the motion to stay," Kennelly told attorneys for both sides in court, granting the companies' request. The judge also directed the parties to submit papers addressing whether the case should be sent back to the state court where it was filed. The judge said he would rule on May 15.
Madigan sued S&P 14 months ago, alleging that it ignored the risks posed by the securities, and chose to curry favor with its clients, thus contributing to the 2008 U.S. economic downturn.
Connecticut sued in 2010; Mississippi, in 2011. The federal government sued the companies on Feb. 4, followed by states including California, Colorado, Missouri and Pennsylvania.
The businesses have denied the allegations, calling the cases a "hindsight-infused attempt by the states to lay blame with S&P for failing to predict the financial crisis."
Read more in our daily News Update...