By William Spain
CHICAGO (MarketWatch) -- Illinois Attorney General Lisa Madigan on Wednesday
sued Standard & Poor's for what she alleges is its "fraudulent role" in
giving high ratings to the mortgage-backed investments that ultimately
contributed to the financial crash. The suit, filed in Cook County Circuit
Court, charges that S&P "compromised its independence as a ratings agency by
doling out high ratings to unworthy, risky investments as a corporate strategy
to increase its revenue and market share." It also holds that the firm, a unit
of McGraw-Hill /quotes/zigman/233490/quotes/nls/mhp MHP
+1.64% ,
ignored the risks posed and instead gave out ratings to please investment-bank
clients and boost its own profits. "Publically, S&P took every opportunity
to proclaim their analyses and ratings as independent, objective and free from
its desire for revenue," Madigan said. "Yet privately, S&P abandoned its
principles and instead used every trick possible to give deals high ratings in
order to retain clients and generate revenue."
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