US government broadens S&P fraud lawsuit to 'unmanageable' level

American courtroom

McGraw Hill Financial Inc’s Standard & Poor’s unit said the U.S. government has broadened the securities covered in its fraud lawsuit against the ratings company so that the case would be unmanageable at trial.

Bloomberg reports that the Justice Department has selected 56 residential mortgage-backed securities and 107 collateralised-debt obligations rated by S&P that will form the basis for its claims at trial that S&P defrauded investors, according to a joint filing Monday in federal court in Santa Ana, California.

'Instead of narrowing its case, the government now proposes that discovery and trial in this action will concern more than five times as many securities as it identified in the complaint', S&P said in the filing.

U.S. District Judge David Carter in Santa Ana, California, has set a 16th December scheduling conference to help determine how big a case the government can bring before a jury and how long both sides will have to get ready for trial.

To access the complete Bloomberg article hit the link below:

S&P Says Government's Fraud Case Over Ratings Is Unweildy

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