Attorney general identifies Moody's, S&P as defendants in video news story
The state of Connecticut is suing ratings agencies over allegations that their ratings on subprime mortgage-backed securities were tainted by huge conflicts of interest.
Connecticut Attorney General Richard Blumenthal today announced that he is suing Moody's Investors Service and Standard and Poor's Ratings Services.
The two companies knew that investors relied on their risk assessments, Blumenthal claims, but still knowingly put out ratings that were wrong. They were "heavily influenced" by powerful investment bank clients, they modified compensation and compliance plans, and they retaliated against employees who wanted to tell the truth.
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