There are, and will continue to be, suspicions regarding the timing of a Department of Justice lawsuit against Standard & Poor’s Rating Services announced this week. With another debt ceiling debate and sequestration cuts in our near future, now might be a good time, some are saying, for an attack on the firm that had the audacity to downgrade the U.S. government’s credit rating in 2011.
The timing of the civil suit, the first federal enforcement action against a credit rating agency over bond ratings, also raises the question of why it took so long. Regardless of why the Justice Department chose this week to strike, it certainly seems long overdue. Could, perhaps, the persistent failure of regulators to reign in ratings agencies have necessitated a move guaranteed to grab headlines and, at least, give the appearance of diligence?
