NEW YORK (TheStreet) -- The Department of Justice is suing Standard & Poor's, the bond-rating unit of McGraw-Hill, on fraud charges, claiming it knowingly misrepresented risks in complex and highly rated debt securities before the financial crisis.
Nearly every one of the S&P-rated securities failed, according to the DoJ's civil fraud suit, which calculates the agency may be exposed to repaying least $5 billion in federal government losses. S&P gained from the artificially high ratings, the government said.
While the DoJ's efforts appear to be targeted at S&P, competitors Moody's and Fitch Ratings may also face scrutiny. In reaction to a New York Times report and the DoJ's charges, industry analysts said there are risks for all ratings agencies.
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