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State Settles Lawsuits With Ratings Agencies

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(File: Bob Child/AP Photo)

(File: Bob Child/AP Photo)

HARTFORD, Conn. (AP) – Connecticut’s attorney general has announced settlements of lawsuits that claimed three of the nation’s leading credit rating firms gave artificially low credit ratings to cities and towns.

The office of Attorney General George Jepsen says that as part of the settlement, Moody’s Investors Service, Inc., Standard & Poor’s, and Fitch, Inc. will give the state a discount of approximately $900,000 on future bond ratings.

The lawsuits were filed in July 2008 and alleged that deceptive practices by the agencies ultimately cost taxpayers millions of dollars in unnecessary insurance and higher interest payments.

Jepsen’s office said Friday that the agencies denied they violated any laws but agreed to the settlements to avoid litigation.

S&P spokesman Edward Sweeney said the agency was pleased to reach an amicable resolution.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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