State Of Tennessee Sues Standard And Poor’s

Tuesday, February 05, 2013

Attorney General Bob Cooper on Tuesday joined the Department of Justice and other state Attorneys General in filing enforcement actions against Standard and Poor’s and its parent company, McGraw-Hill, seeking accountability for alleged misconduct by the credit rating agency.  The allegations involved structured finance securities backed by subprime mortgages that were at the heart of the nation’s financial crisis.

The federal and state complaints allege that despite S&P’s repeated statements emphasizing its independence and objectivity, S&P allowed its credit rating analysis to be influenced by its desire to earn lucrative fees from its investment bank clients.  Investors and others in the marketplace relied on credit rating agencies like S&P for accurate ratings because the underlying data for these securities was not publicly available.

This alleged misconduct began as early as 2001, became particularly acute between 2004 and 2007, and continued as recently as 2011.

Structured finance securities backed by subprime mortgages were at the center of the financial crisis.  These financial products, including residential mortgage-backed securities (RMBS) and collateral debt obligations (CDOs), derive their value from the monthly payments consumers make on their mortgages.

“The complaint filed in state court today alleges that investors as well as others in the market were misled by Standard and Poor’s promises that its analysis was independent and objective. Unfortunately, as the complaint alleges, this was not the case, and ratings of mortgage backed securities and collateral debt obligations were influenced by the desire to continue earning lucrative fees,” Attorney General Cooper said. 

Tennessee’s lawsuit seeks relief to stop S&P from making misrepresentations to the public; change the way the company does business; and civil penalties and disgorgement of ill-gotten profits.

The congressionally-appointed bipartisan Financial Crisis Inquiry Commission concluded in its final report that the financial crisis “could not have happened” without ratings agencies such as S&P.

The State’s Complaint may be found on the Attorney General’s website by going to www.tn.gov/attorneygeneral and clicking on “Filings of Interest.”

 


La-Z-Boy Receives Commissioner's Award Of Excellence For Safety, Health

Tennessee Department of Labor and Workforce Development Commissioner Burns Phillips announced that La-Z-Boy, Inc. located in Dayton was chosen to receive the Commissioner’s Award of Excellence for Workplace Safety and Health.  "La-Z-Boy, Inc. has demonstrated strong commitment to maintaining a safe and healthy workplace," said Commissioner Phillips, who presented the award ... (click for more)

Community Support Needed For Local Food Banks

Local food banks are preparing for the upcoming school year and the fight against childhood hunger. BI-LO has launched the Summer Backpack Hunger Relief Program in all stores to help children who don’t know from where their next meal will come from.  Customers are encouraged to donate at any store register through August 19 to help provide meals for healthy minds and bodies ... (click for more)

DA Looking Into Issue Of County Commission Candidate's Campaign Sending Filled-Out Requests For Absentee Ballot To Elderly Voters

The District Attorney's Office has been provided with documents that a County Commission candidate's campaign sent filled-out requests for absentee ballots to elderly voters. Kerry Steelman, election administrator, said there have been four instances in which such requests came from the Elect John Brooks campaign. He said state law says in Section 2-6-202:  (3) A person ... (click for more)

Graham Says County School-City Lawsuit Settlement "Stinks," But County Commission Approves It

The County Commission on Wednesday approved a settlement of a lawsuit brought by the Hamilton County Schools against the city of Chattanooga, though several commissioners said they were not happy with the deal and Commissioner Joe Graham said it "stinks." Commissioner Graham was the lone no vote. He was joined by Commissioner Tim Boyd in a failed effort to defer it a week. ... (click for more)

Pickle Ball? - And Response

Collegedale has done some wonderful things for its residents.  The Greenway is a perfect example of money well spent on helping to give her residents the opportunity to improve their lives, at least from a health standpoint. Having taught at Wolftever Creek for a decade plus, I was fortunate to have opportunity to take my classes on walks from time to time.  It provided ... (click for more)

Roy Exum: Say It Ain't So, Larry Joe!

Larry Joe Wheelon, the tainted horse trainer who was charged with 18 counts of aggravated animal cruelty when his barn was raided in April of 2013 and some animals were sored so badly that they could barely walk, finally went to a court hearing in Blount County on Wednesday and his steps toward Judge Tammy Harrington’s bench were decidedly heavy. My goodness, yours would have been ... (click for more)