Idaho sues Standard & Poor's over subprime ratings
BOISE, Idaho (AP) -- Idaho has filed a lawsuit alleging the credit-rating agency Standard & Poor's broke state consumer-protection laws by understating the risks of subprime mortgage securities.
Investors use Standard & Poor's ratings to determine whether to buy securities such as those related to subprime mortgages.
The lawsuit filed Tuesday alleges the rating agency claimed to be independent but actually catered to large clients that shopped around for favorable ratings.
Idaho Attorney General Lawrence Wasden says in the suit those improperly securities rated are in the retirement plans of many Idaho citizens.
The state says Standard & Poor's should have to pay up to $5,000 for each violation, plus additional remedies.
A separate U.S. Department of Justice lawsuit seeks $5 billion or more from the ratings agency.