S&P Settles for $1.375 Billion Over Fraudulent AAA Ratings on Junk Mortgage Securities, While Moody's Pays $864 Million, Exposing 'Issuer-Pays' Conflict of Interest Model Where 73% of 2006 AAA-Rated Securities Were Downgraded to Junk by 2010

On February 3, 2015, the Department of Justice, 19 states, and the District of Columbia reached a $1.375 billion settlement with Standard & Poor’s (S&P) over allegations that the credit rating agency knowingly inflated ratings on risky mortgage-backed securities and collateralized debt …