The New York Times reports that S&P accused the DOJ of presenting charges that were based on ‘snippets’ of conversation that fail to meet the legal requirements of demonstrable acts of fraud. S&P added that its positive ratings on collateralized debt obligations in the period leading up to the 2008 financial crash were endemic of a wider inability to identify the state of a fraying economy.
‘From start to finish, the complaint overreaches in targeting S&P,’ says the rating agency's attorneys in a brief filed in the U.S. District Court for the Central District of California. ‘S&P's inability, together with the Federal Reserve, Treasury, and other market participants, to predict the extent of the most catastrophic meltdown since the Great Depression reveals a lack of prescience, but not fraud.’
The DOJ did not comment on the S&P request.