On Air Now

Upcoming Shows

Program Schedule »

Tune in to Listen

1440 AM Green Bay, WI

Weather

Current Conditions(Green Bay,WI 54303)

More Weather »
42° Feels Like: 37°
Wind: W 8 mph Past 24 hrs - Precip: 0.08”
Current Radar for Zip

Tonight

Rain 40°

Tomorrow

PM Showers 59°

Sat Night

Mostly Clear 34°

Alerts

  • 0 Severe Weather Alerts
  • 0 Cancellations

New York attorney general probing three major rating firms: source

By Karen Freifeld

NEW YORK (Reuters) - New York Attorney General Eric Schneiderman has kicked off an investigation into three major credit ratings agencies, according to a person familiar with the matter, a move that follows the U.S. Justice Department's $5 billion lawsuit against Standard & Poor's over pre-crisis mortgage bond ratings.

Schneiderman issued a subpoena to Standard & Poor's this week, a person familiar with the matter told Reuters. S&P is a unit of The McGraw Hill Cos . His office also sent formal requests for information to two other major credit rating agencies, Moody's and Fitch Ratings, the person said.

Schneiderman is seeking information related to the agencies' conduct in rating mortgage-backed securities and whether the companies abided by agreements in 2008 to make certain reforms, according to the person.

The 2008 agreements, signed by the three firms, settled an earlier probe by the New York attorney general's office of the firms' ratings of residential mortgage-backed securities leading up to the financial crisis.

New York's 2008 probe was part of an investigation of conflicts of interest, fraud and other misconduct in the mortgage industry. The 2008 agreements contained no sanctions. Reforms included a new fee structure and increased transparency.

Schneiderman is now seeking information to see whether he can bring new action against the agencies, the person said.

The 2008 agreements, which expired in 2011, were signed by then-New York attorney general Andrew Cuomo, now the state's governor.

It is unclear if the expired agreements will allow New York to pursue legal action. The agreements contain a provision that allows the attorney general to terminate the settlements if the ratings agencies fail to comply with them.

Ed Sweeney, a spokesman for Standard & Poor's, declined to comment on the subpoena. Moody's and Fitch officials could not be reached for comment by Reuters outside of regular U.S. business hours.

News of the attorney general probe was first reported by the Wall Street Journal.

(Additional reporting by Sakthi Prasad; Editing by Matt Driskill)

Comments