Reuters: U.S.: Justice Department wants states to decide S&P lawsuits

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Justice Department wants states to decide S&P lawsuits Mar 29th 2013, 21:35 Tweet Share this Email Print Related News Supreme Court indicates it may strike down marriage law Wed, Mar 27 2013 UPDATE 3-U.S. high court rules for insurer in class action case Tue, Mar 19 2013 Apple CEO Cook ordered to testify in e-books case Wed, Mar 13 2013 Analysis: S&P paper trail may lead nowhere in government case Mon, Mar 11 2013 S&P seeks to move 16 ratings lawsuits to federal court Wed, Mar 6 2013 Analysis & Opinion Do dealers have a chokehold on CDS markets? Gay marriage, voters' rights and the thorny Prop 8 standing problem Related Topics Investing and Taxes Simplified » U.S. » A view shows the Standard & Poor's building in New York's financial district February 5, 2013. Credit: Reuters/Brendan McDermid WASHINGTON | Fri Mar 29, 2013 5:35pm EDT WASHINGTON (Reuters) - The Department of Justice opposed Standard & Poor's efforts to move a spate of lawsuits charging the ratings agency with fraud to federal from state courts. Standard & Poor's is seeking to move lawsuits by 15 U.S. states and Washington, D.C. to the federal level, hoping to limit liabilities as it defends itself against accusations of inflating credit ratings in a bid to win fees from clients. But the Department of Justice, in a filing in the U.S. District Court for the District of Connecticut on Friday, said there was no basis in law to move the cases to the higher-level. "Based on the nature of the causes of actions alleged by the States, and the controlling precedents, there is no federal-question jurisdiction justifying removal," it said. S&P parent McGraw-Hill has said that the suits should be addressed all at once and that failure to do so could cause "serious confusion and risk" to financial markets. Connecticut Attorney General George Jepsen is leading a coalition of attorneys general that brought the state cases. These were announced on February 5, the same day that the Justice Department said it was seeking $5 billion in its own civil lawsuit against S&P. McGraw-Hill shares lost more than a quarter of their value during the week the suits were announced. They closed on Thursday at $52.08 a share. Legal experts said earlier that S&P might struggle to move the state cases, given recent similar cases. The lawsuits allege that S&P misled investors into believing its ratings were objective and not tainted by conflicts of interest. The ratings were mainly for complex fixed income products that imploded in the financial crisis. Moody's Corp's Moody's Investors Service and Fimalac SA's Fitch Ratings, S&P's main rivals, were not hit with similar federal lawsuits. (Reporting by Douwe Miedema; Editing by Leslie Gevirtz) Investing and Taxes Simplified Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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