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Standard & Poor's Says DOJ Civil Lawsuit Is Unjustified And Without Legal Merit

"The DOJ omits important context about the emails it cites.  For example, the email that says deals 'could be structured by cows' and be rated by S&P had nothing to do with RMBS or CDO ratings or any S&P model, and the analyst had her concerns addressed with the issuer before S&P issued any rating.  The DOJ also cites the fact that S&P personnel discussed proposed rating criteria with market participants as evidence of wrongdoing although under certain recent regulations, S&P is required to do just that.  When the full facts are revealed in court, it will be clear the emails and anecdotes being cited do not prove any wrongdoing.

"Like many other institutions, S&P has taken to heart the lessons learned from the financial crisis.  In the past five years, we have spent approximately $400 million to reinforce the integrity, independence and performance of our ratings. We also brought in new leadership, instituted new governance and enhanced risk management. We have taken substantive actions to:
  • Strengthen independence from issuer influence: We further strengthened existing analytical independence, enhanced analyst training on issuer interactions and instituted a rotation program for analysts assigned to rate bonds from specific issuers of debt.
  • Improve our methodologies: We revised the way we rate securities affected by the financial crisis and introduced more stringent criteria that, among other changes, set higher requirements to achieve AAA ratings.
  • Monitor global credit risks: We established Credit Conditions Committees around the world to identify and monitor risks to the interconnected global credit markets   and created a coordinated risk perspective across the company.
  • Enhance regulatory compliance and analytical quality: We significantly increased staffing to strengthen analytical quality and ensure compliance with new government oversight and laws in the U.S., EU and elsewhere."

For more information about S&P's extensive improvements and the current regulatory framework governing rating agencies, please visit

About Standard & Poor's Ratings Services:  Standard & Poor's Ratings Services, part of The McGraw-Hill Companies (NYSE:MHP), is the world's leading provider of independent credit risk research and benchmarks. We publish more than a million credit ratings on debt issued by sovereign, municipal, corporate and financial sector entities. With over 1,400 credit analysts in 23 countries, and more than 150 years' experience of assessing credit risk, we offer a unique combination of global coverage and local insight. Our research and opinions about relative credit risk provide market participants with information and independent benchmarks that help to support the growth of transparent, liquid debt markets worldwide.

Additional information is available at

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Release issued:  February 5, 2013

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