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Arizona joins lawsuit on mortgage meltdown

Horne joined federal and state enforcers in filing actions against Standard and Poor’s for alleged misconduct involving structured finance securities backed by subprime mortgages that were at the heart of the nation’s financial crisis. Arizona is suing under the Arizona Consumer Fraud Act.

Horne added, “S&P put ‘AAA’ and other favorable ratings on what in many cases were worthless securities, and I sued them for misrepresenting their independence and objectivity rating investors bonds. The evidence will show that S&P issued inflated ratings they knew were false and as a result, Arizona’s economy was substantially harmed.”

The complaint alleges that despite S&P’s repeated statements emphasizing its independence and objectivity, S&P allowed its analysis to be influenced by its desire to earn lucrative fees from its investment bank clients, and knowingly assigned inflated credit ratings to toxic assets packaged and sold by the Wall Street investment banks.

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