Arkansas Attorney General Leslie Rutledge said Arkansas will receive $21.5 million as a result of a $1.375 billion state-federal settlement involving Standard & Poor’s Financial Services.
Arkansas, the U.S. Department of Justice and a coalition of 18 other states and the District of Columbia reached the settlement with Standard & Poor’s resolving allegations that S&P misled investors when it rated structured finance securities in the lead-up to the 2008 financial crisis.
“Today, I am pleased to announce that after years of hard work and litigation, S&P is finally being held accountable for its role in the 2008 financial crisis,” said Rutledge. “Arkansas consumers expect, and are entitled to, an impartial independent analysis of securities from credit-rating agencies. Unfortunately, for many years, S&P placed profit above people. But thanks to the work of this partnership between the States and the Department of Justice, we are demonstrating that no company, no matter its size, can circumvent the law.”
In early 2013, Arkansas joined the lawsuit against S&P.
The federal and state complaints against S&P alleged that, despite S&P’s repeated statements emphasizing its independence and objectivity, the credit rating agency allowed its analysis to be influenced by its desire to earn lucrative fees from investment bank clients – while investors and other market participants, including state regulators, relied on S&P’s promises of independence and objectivity.
In addition to the financial settlement, S&P has agreed to a statement of facts acknowledging conduct related to its analysis of structured finance securities. S&P will also comply with all applicable state laws, including the Arkansas Deceptive Trade Practices Act, and for five years will cooperate with any request for information from any state expressing concern over a possible violation of state law.
In addition to Arkansas, the states involved in today’s settlement include Arizona, California, Colorado, Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa, Maine, Mississippi, Missouri, New Jersey, North Carolina, Pennsylvania, South Carolina, Tennessee and Washington as well as the District of Columbia.