Photo: Jason Swaby (flickr)
Indiana is one of more than a dozen states filing lawsuits against the global financial firm Standard & Poor’s, alleging it misled investors by skewing its rating system to help its clients.
Indiana Consumer Protection Division Deputy Director Terry Tolliver says, since 2004, S&P, one of the firms responsible for rating finance securities such as residential mortgage-backed securities, has been shifting its ratings to favor its own clients.
“There were some changes being made or that S&P’s own criteria were not being followed in order to ensure that triple A ratings, which is the best one, would be assigned,” he says.
Tolliver says that skewed analysis is one of the factors that contributed to the country’s recent financial crisis.
“A lot of people rely upon S&P’s ratings,” he says. “You often hear about the S&P ratings and this triple A credit rating and at least in this particular case involving these particular financial instruments, that reliance may not have been appropriate.”
Standard & Poor’s could not be reached for comment.