Free Republic

I wrote Tuesday about the hypocrisy and perhaps vindictiveness of the Department of Justice’s lawsuit against ratings agency Standard & Poor’s for rating toxic mortgage-backed securities and their derivatives highly before the housing bubble popped. Apparently I wasn’t tough enough on … the DoJ. Bloomberg’s Jonathan Weil explains why the lawsuit isn’t just ill-considered, but downright silly: Oh, the poor suckers at Citigroup Inc. and Bank of America Corp., fooled about the stench of their own garbage by those sneaky credit raters at Standard & Poor’s.The U.S. Justice Department made some peculiar allegations in its lawsuit this week against S&P...

In charges filed late Monday in Los Angeles federal court, the Justice Department said S&P gave high marks to mortgage-backed securities that later went sour, even though it knew they were risky. The government said S&P misrepresented the risks because it wanted more business from the banks. The case is the government's first major action against one of the credit rating agencies that stamped their seals of approval on Wall Street's mortgage bundles. It marks a milestone for the Justice Department, which has been criticized for failing to make bigger cases against the companies involved in the crisis. "Put simply,...