the question: View this 2013 PBS clip about the DOJ’s lawsuit filed against Standard and Poor’s alleging the credit rating agency mislead investors leading up to the 2008 economic meltdown. In the end, the DOJ and S&P settled the lawsuit, which required S&P to pay out a whopping $1.4 billion to the DOJ and several states. No one went to jail and S&P did not admit wrongdoing. Research the lawsuit and examine the concept of justice. Was justice was served?
My discussion :
Justice was served by Standard and poor’s paying the DOJ and several states. Standard and poor’s knew its Products were not rated but still convinced investors to purchase those vehicles while in the real sense they were not as good as they said which led to the collapse of the economy(PBSO NEWS HOUR, 2013). Doj claimed that S and P ratings were faulty and fraudulent which led to millions of people losing their jobs, homes, and financial security from the anonymous amount of evidence collected from internal reports of S and p which proved that they knew the ratings they gave out to the public were not independent and objective.PBSO NEWS HOUR. (2013, February 6) justice department: Standard and Poor’s defrauded, investors.
. YouTube.
My classmate’s discussion : 1-
Akesa
I found this lawsuit very interesting but I was not impressed by the fact no one served time and that a “fine” was payed instead. It seems that paying in frau cases constitutes justice when it comes to white collar crime. When I think of justice, I’m hoping its punishment that is suitable to the crime and represents equal punishment meaning at any level of fraud or othe white collar crimes each individual be charged and treated the same. With that being said, when I read the Department of Justice news update on the lawsuit, Attorney General Branda mentioned that with the historic settlement, it meant and showed that the DOJ is willing to do any and all thing’s to hold those accountable for financial crime. From my understanding of fraud cases, usually individuals can be sentenced depending on the status offense (misdemeanor/felony). I feel that because there was so much money involved and these big corporations, the government feels they could just brush this under the rug. Other people who might commit fraud would most likely pay a fine and serve tike. Therefore, I don’t think justice was served. There is a lack of fair treatment in terms of how larger corporation get handled vs much smaller companies and people.
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2- Naz
I think that S&P members should have been charged on criminal charges. They were aware of what they were doing and didn’t think that they were going to get caught. The profits that they were making was driving S&P to give false rating. The fact that this was a civil case I think that this is why they weren’t stressed on the outcome as much and continued committing fraud. The DOJ did 3 years of investigations and this is what lead them to a civil case, I honestly think that if there was more fear such as a criminals case and some jail time added their would be a mountain of people talking about all the other companies doing this as well. This is so sad because so many people lost their homes during this time due to the bad rating that companies like S&P provided. In my opinion justice wasn’t served and their should of been criminal charges attached to this as well.
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3- Frederick :When it comes to the 2008 economic recession and the involvement of the S&P company, I believe justice wasn’t served as those responsible were put in jail or dealt any repercussions personally to themselves especially considering the damage done unto others. Chuck Jones of Forbes Magazine pointed out that the unemployment rate was drastic as in 2008-2009 there was a total of 8.6 million jobs lost (Jones 2020). I believe justice was not served as a settlement didn’t go to those affected, and it doesn’t total to the number of people’s livelihoods that were taken away due to the greed of S&P.
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4- Ashely :I don’t believe that justice was served for the millions of people that lost their jobs and homes during the 2008 great recession. Many of those people still have not recovered from the 2008 recession. Knowing that there was proof such as internal emails and internal information stating things like “It could be structured by cows and we would rate it,” and “We are meeting with your group this week to discuss adjusting criteria for rating CDOs (a type of investment) of real estate assets this week because of the ongoing threat of losing deals”.S&P had to make their ratings look favorable to their borrowers thus providing inaccurate ratings in order to build revenue. Reuters wrote “Under the deal, S&P did not admit to any violations of law, but it did sign a statement of facts acknowledging that its executives in 2005 delayed implementing new models that produced more negative ratings”. How could S&P really claim no wrong doing when in fact they knew executives held back information regarding negative ratings. Even though the payout from S&P was more than their profits earned in 2002-2007, I believe it should have been treated as a criminal case and not a civil case. All in all they are responsible for a financial crisis in which should have been dealt with larger penalties and consequences. Write her a reply …..