The California attorney general opened an investigation today to determine whether key credit ratings agencies broke state law by giving positive ratings to faulty mortgage-related securities packages, according to MarketWatch. Attorney General Edmund Brown issued a subpoena to Moody’s, Standard & Poor’s, and Fitch—the “big three” ratings agencies—to determine the facts in an investigation into the raters’ possible breach of California state law. “[The agencies] put their seal of approval on high risk mortgage-backed securities, recklessly giving stellar ratings to shaky assets that proved toxic to the entire financial system,” said Brown.
California AG Investigates Possible Ratings Agency Illegalities
The “big three” ratings agencies have been issued a subpoena by the California attorney general.
September 17, 2009