Indiana will receive $21.5 million as part of a more than $1 billion legal settlement with Standard & Poor’s announced Tuesday. The company was accused of inflating credit ratings during the recession.
Attorneys alleged S&P altered securities credit ratings so that they didn’t represent the investments’ true risks, a move that cost investors billions of dollars.They argue that S&P benefited because of the large fees it received from investment banks selling those assets.
Indiana Attorney General Greg Zoeller says the $1.4 billion dollar legal settlement will eliminate any profits S&P made from its actions.
“The problem that this caused, essentially at the beginning of the Great Recession, may have taken us a long time to get to the bottom of, but I think this case clearly shows states couple with federal government, can and will go after people in these kinds of circumstances,” Zoeller said.
The settlement requires S&P’s parent company, McGraw Hill Financial, to pay 19 states and Washington D.C. nearly $690 million. The remainder of the settlement will go to the Justice Department. Most of the $21.5 million Indiana receives will go into the state’s general fund.
In a statement S&P’s parent company says it has imposed new requirements to address future conflicts of interest.
