As early as in 2007, began as a sign of distress in the residential mortgage backed securities, the s&p executives began to provide consulting analyst is responsible for the rating of mortgage bonds, they should put the phrase "privileged and confidential" on the email each other.
Analysis of McGraw-hill COS department also encourages graffiti notepad and official documents, during the meeting to discuss pending transactions and existing rating, S&P said former employees.
This is the first time the S&P had tried to remind employees about the path of the file. In 2005, a full two years, before the housing market began to melt and, several top S&P executives attend off-site for hotel old brook, Connecticut, discuss the way, in order to increase the cost, it collects from Wall Street Banks rating mortgage bonds. S&P, a former executive said after the meeting, staff instructions to abandon any sign that they took from the meeting.
Facts have proven that S&P employees don't listen to this warning. The U.S. government's civil fraud lawsuit on the S&P in relies heavily on E-mail, staff integrity expressed doubts about the rating agencies.
But the S&P could still. Legal and business experts and some criticism of covered bonds, even during the financial crisis, the role of rating agencies, not impressed with the prosecution of manual. Most legal experts interviewed said that they expect S&P shall prevail at the trial, if not before that is well below the $500 million the government is seeking in the lawsuit reconciliation.
Although there are a few lawyers said that the government's case, is a powerful, has ten several securities lawyers, told Reuters in see a significant weakness about a claim of fraud.
The lawsuit faced many of the same problem, has been plagued by many other failed cases, the rating agencies in recent years.
Prosecutors that would be very hard to believed that a separate toilet is small & P a unique window into the shaky state of the us housing market in early 2007, Wall Street Banks the troubled securities, or even if the U.S. federal reserve, did not have. Other lawyers pointed out that the S&P in early 2007 residential mortgage bond ratings moody's investors service, the rating agencies, the government not to prosecute the opponent is not much different.
"This is a worst case. This is all a hammer to get a settlement and settlement so far, we have seen, is a mere slap on the wrist," said janet coyle srivastava, a derivatives and structured finance consultant who has written some books on complex securities. She said case "to perform account, the bank staff, this is the subprime crisis is how bad, they may not know."
Justice department spokeswoman didn't respond to requests for comment, do not specify any individual as a defendant in the lawsuit. Submit statement, announced that the U.S. attorney general Eric holder said, "this charge behavior was shocking - and it is the heart of the recent financial crisis."
, legal experts said the U.S. government, to suffer, especially the lack of available the witness to make a convincing argument, the S&P intentionally defrauding bank flap and 2 federal credit union investment grade ratings dozens of mortgage bond trading, quickly ran to the side of the chest.
They also expect the S&P argue that the two credit cooperatives transformation for the victims of the prosecutors are professional investors, was bought by the criticism of the federal government supervisor does mainly by the risk of subprime mortgage bonds. For citigroup and bank of America, prosecutors argued lost money, because the S&P rating mortgage bond trading for these institutions could trigger a similar point of view.
A mean, its ratings to a great extent, support the bonds of Wall Street bank to provide mortgage data information is based on national defense, the S&P can improve, at Louisiana state university business professor Joseph mason said.
"Banks signed, this is good data," mason says, action of reason, just said something.
To be fair, by the justice department in February 4, 119 - page listed in the civil complaint email suggests, is responsible for monitoring the performance of mortgage securities, some analysts see a sharp deterioration in the housing market.
Complaints also provides detailed desire, S&P officials continued to rating mortgage bond trading, collateralised debt obligations, in particular, the rating agencies' one of the most profitable products.
Government argues that the S&P gave up work and chase rich rating, these transaction costs - at each level of mortgage bonds at $150000 and $500000 for a typical piece of a wide range of mortgage bonds cdos, security.
"I have a lawsuit related to financing and bank financing cases for many years, it seems to be one of the strongest, Richard greenfield said:" jia hui goodman, who is the last part of the prosecution of moody's and reconciliation, including governance reform and $4.95 us $payment credit rating agencies.
S&P said: "in hindsight are unfounded, well-meaning professional opinion, to take legal action." Until next month to submit the formal suit for the first time, the company said it aims to strive for the demands of the government.
To find the witness
A federal prosecutor, said details who is not involved in the S&P, but some securities fraud prosecution side email the rest of the main is "just didn't work out."
Prosecutors the best way to use email effectively proposed witness, who can explain how they reflect the intentionally deceiving the investing public.
Written email, however, many current S&P employees, legal experts say, who will have a strong incentive, offer the most innocent explanation, to testify if their communication requirements.
Reuters review found that there are at least a quarter of the 40 or so people at the justice department complaint complaint is still employed by S&P.
For example, has a very sweet, structure of finance analyst at S&P. More rich and colorful instant message in one of the authors listed in the complaint, Mooney, wrote in 2007, the agency will rate transaction "structure of cows."
Cherry said the S&P, like this news
 



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