News / Economy

Report: Standard & Poor's is Under Investigation

The Standard and Poor's building in New York, August 2, 2011
The Standard and Poor's building in New York, August 2, 2011

A major American newspaper says the U.S. is investigating the financial services company that downgraded the U.S. credit rating for its faulty rating of mortgage securities that played a major role in the country's 2008 recession.

The New York Times reported that the Justice Department is looking at dozens of securities that Standard & Poor's rated as safe investments that later turned out to include mortgages that were not repaid by borrowers. The failure of the investments has been partly blamed for the sharp downturn in the U.S. economy three years ago, a recession from which it is still struggling to recover.

The newspaper said the investigation began before Standard & Poor's recently cut the U.S. credit rating from AAA to AA-plus. The credit downgrade was an indication the firm's analysts viewed the U.S. as a slightly riskier bet to repay its debts in the aftermath of a contentious political debate over raising the country's borrowing limit. The two other major credit rating firms, Moody's Investor Services and Fitch Ratings, have continued to give the U.S. their top ratings.

Some lawmakers in the U.S. have grown increasingly wary about the role of the financial services firms in setting credit ratings on the safety of investing in government and corporate bonds. With the unprecedented U.S. credit downgrade, some government officials have been looking for ways to lessen the impact of such ratings, which investors rely on to decide which securities to buy.

The Times
reported that Justice Department investigators have been looking at whether some S & P analysts wanted to set lower ratings on the mortgage securities before the recession started, but were overruled by the company's business managers. Companies selling securities pay the ratings agencies to provide a rating, and the newspaper said that some security sellers shopped around among the ratings agencies to make sure they would receive a favorable rating before agreeing to do business with them.

Standard & Poor's said it is cooperating with all investigators looking at its operations.

You May Like

US Investors Eye IPO for China's Alibaba

E-commerce giant handled 80 percent of China's online business last year, logging more Internet transactions than US-based Amazon.com and eBay combined More

Video Uneasy Calm Settles Over Israel, Gaza Strip

As cease-fire begins, Palestinians celebrate in streets; Israelis remain wary More

Video Chinese Doctors Use 3-D Spinal Implant

In treatment of a 12-year-old boy Chinese doctors used a 3-D printer and special software to create an exact replica of vertebra More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Chinese Doctors Use 3-D Spinal Implanti
X
August 27, 2014 4:53 PM
A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. VOA News reports from Kolkata.
Video

Video Northern California Quake: No Way to Know When Next One Will Hit

A magnitude 6.0 earthquake rocked northern California’s Napa Valley on Sunday. Roads twisted and water mains burst. It was the wine country’s most severe quake in 15 years, and while hospitals treated many people, no one was killed. Arash Arabasadi has more from Washington on what the future may hold for those residents living on a fault line.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.
Video

Video Ukraine: Captured Troops Proof of Russian Role in Separatist Fight

Ukrainian officials say they have captured Russian soldiers on Ukrainian territory -- the latest accusation of Moscow's involvement in the conflict in eastern Ukraine. VOA's Gabe Joselow reports from the Ukrainian side of the battle, where soldiers are convinced of Russia's role.
Video

Video Rubber May Soon Come From Dandelions

Synthetic rubber has been around for more than a century, but quality tires for cars, trucks and aircraft still need up to 40 percent or more natural rubber content. As the source of natural rubber, the rubber tree, is prone to disease and can be affected by bad weather. So scientists are looking for replacements. And as VOA’s George Putic reports, they may have found one in a ubiquitous weed.
Video

Video Jewish Life in Argentina Reflected in Yiddish Tango

Jewish people from across Europe and Russia have been immigrating to Argentina for hundreds of years. They brought with them dance music that were eventually mixed with Argentine tango. The result is Yiddish tango -- a fusion of melodies and cultural experiences that is still evolving today. Elizabeth Lee reports from the Skirball Cultural Center in Los Angeles, where one band is bringing Yiddish tango to an American audience.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.