S&P claims US lawsuit is 'retaliation' for ratings downgrade

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Ratings agency Standard and Poor's (S&P) has claimed the lawsuit filed against it by the US Justice Department was 'retaliation' against its decision to downgrade the US's credit rating.

BBC News reports that the agency was sued in February over its assessment of mortgage-backed securities before the financial crisis.

The suit alleged that S&P turned a blind eye to risks in the products, and gave them ratings that were too high.

The US government is seeking $5bn (£3bn) in penalties.

In a court filing on Tuesday, S&P, which had previously said the case was without merit, claimed that it was being sued in retaliation for its downgrade of the US credit rating in 2011.

S&P downgraded the US rating in August 2011 by one notch, from AAA to AA+, amid a standoff in Congress over whether to raise the country's borrowing limit.

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S&P: US lawsuit is 'retaliation' for ratings downgrade

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