S&P GLOBAL INC

In February 2015, the DOJ and 19 states secured a $1.375 billion settlement with Standard & Poor's Financial Services LLC (now S&P Global) to resolve allegations that S&P defrauded investors in residential mortgage-backed securities and collateralized debt obligations in the lead-up to the 2008 financial crisis. The penalty — $687.5 million to the federal government and $687.5 million divided among the states — was the largest ever paid by a credit rating agency.

The DOJ alleged that between 2004 and 2007, S&P misrepresented the stringency and objectivity of its ratings, which were plagued by conflicts of interest that incentivized S&P to artificially inflate ratings in order to appease the issuers that paid millions of dollars for its services. Investors incurred substantial losses on securities for which S&P issued inflated ratings that misrepresented the true credit risks. S&P separately reached a $1.5 billion settlement with CalPERS and other institutional investors. In 2024, the SEC charged S&P Global Ratings with significant recordkeeping failures (SEC Press Release 2024-114). The MBS ratings fraud and subsequent regulatory pattern reflect an institution whose revenue model creates structural incentives to compromise analytical independence.