Ratings Agencies 'Key' to Mortgage Crisis Meltdown

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Standard and Poor’s is the first rating agency to face civil fraud charges from the federal government. The Justice Department filed a civil complaint against the company on Monday. It’s the first federal enforcement action against a credit rating firm since the financial crisis almost five years ago.

Joe Nocera, a columnist with The New York Times and a WNYC contributor, tells Soterios Johnson that ratings were key to the selling of toxic assets. “If S&P had been willing to say these are not AAA ratings, these are pretty bad bonds, they couldn’t have been sold. The ratings were key to the entire process,” he said.

The company says it is being unfairly punished for failing to predict the housing meltdown.

More than a dozen states are expected to join the federal suit.  New York Attorney General Eric Schneiderman is reportedly preparing a separate action.

Listen to the full interview above.