Sometimes it’s all about time. Things take time. Time catches up to things.
In the case of the many crimes and misdemeanors that led up to the credit crisis, time seems to be finally catching up with some crooked institutions.
As for the real crooks, as in the individuals who lied, cheated, stole, and directed others to lie, cheat, steal, and more for their share of the almighty bonus pool… not so much.
But sometimes, you take what you can get.
This time it’s a rating agency’s turn… It’s not enough. But today I’m going to share this bit of good news.
Rated G… for Garbage
In February 2013, the U.S. Department of Justice slapped Standard & Poor’s with a $5 billion civil suit. Apparently, for fraud, filing criminal suits is not civilized, at least not if you want to keep getting political donations.
S&P and its parent, McGraw Hill Financial Inc. (NYSE: MHFI), pooh-poohed the 119-page suit – of course. They called it “meritless†and vowed to defend themselves “vigorously.â€
The lawsuit charges S&P with egregiously rating residential mortgage-backed securities and related structured products it knew were garbage as USDA Choice or AAA Yummy Good. And believe it or not, a lot of people bought it.
S&P is only the largest rating agency in the world. It only rated some $2.8 trillion worth of residential mortgage-backed security (RMBS) junk and $1.2 trillion worth of structured dreck during the run-up. And then it subsequently downgraded all that supposed Prime Cut to “Oops, it’s stinky rotten. How were we supposed to know things would change?â€
So, at least the economy and the American people weren’t affected. Because what’s a few trillion dollars of rot in an otherwise healthy buffet of Wall Street entrées?
Some serious stuff, as in smoking-gun internal emails at S&P, has surfaced. According to a Reuters article that came out after the suit was filed,
