California Atty. General Kamela Harris filed suit against S&P today on behalf of the state’s two public pension funds. Harris accuses the credit agency of deception and she’s seeking billions of dollars in compensation for what she calls “intentional corruption” of California’s credit markets. She says S&P purported to be an independent agency but was really acting to benefit large financial institutions selling mortgage-backed securities. The flawed ratings cost CalPERS and CalSTRS at least a billion dollars, says Harris, and helped trigger the state’s mortgage meltdown and financial crisis. The federal government filed a similar lawsuit against S&P yesterday. The company, a division of publisher McGraw-Hill, has denied any wrongdoing.
KCRW spoke with Harris about the lawsuit: