Housing Market, Credit Rating | featured news

Standard & Poor's Corp. helped cause the financial crisis by misleading investors with falsely high credit ratings on bonds backed by toxic subprime mortgages, federal officials alleged Tuesday in announcing a civil suit against the company.

The Justice Department and state prosecutors plan to file civil charges against Standard & Poor’s Ratings Service, accusing the firm of fraudulently rating mortgage bonds that led to the financial crisis, people briefed on the plan said.

Federal prosecutors are stepping up their investigation of Standard & Poor's ratings of troubled mortgage securities during the financial crisis, according to former analysts questioned by prosecutors.

If nothing else, the legal maneuver will buy them some breathing room. But it also will destroy their credit rating, and it may not even be necessary.

To most people, bankruptcy is a four-letter word.