Obama's retaliatory witch-hunt of S&P going nowhere

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Analysis: S&P paper trail may lead nowhere in government case

The U.S. government's civil fraud lawsuit against S&P relies heavily on emails in which employees voiced doubts about the integrity of the agency's ratings.

But S&P may still come out on top. Legal and business experts, and even some critics of the role of the rating agencies in vouching for bonds during the financial crisis, aren't impressed with the prosecution's handiwork. Most legal experts interviewed said they expect S&P to prevail at trial, if there isn't a settlement before then for considerably less than the $5 billion the government is seeking in the lawsuit.

While a few lawyers said the government's case is a strong one, a dozen securities lawyers interviewed by Reuters saw significant weaknesses in the fraud claim.

The lawsuit suffers from many of the same problems that have plagued dozens of other unsuccessful cases against the rating agencies in recent years.

It will be hard for prosecutors to argue that S&P alone was privy to a unique window into the shaky state of the U.S. housing market in early 2007, which the Wall Street banks churning out the securities, or even the U.S. Federal Reserve, didn't have. Other lawyers point out that S&P's ratings on residential mortgage bonds in early 2007 weren't much different from those of Moody's Investors Service, a rival rating agency the government hasn't sued.

A federal prosecutor who is not involved with the S&P case but has been party to a number of securities fraud prosecutions said cases that rest mainly on emails are "just not successful."

The best way for U.S. prosecutors to use emails effectively is to bring forward witnesses who can explain how they reflected a deliberate intent to deceive the investing public.

But many of the emails were written by current S&P employees, who legal experts say will have a strong incentive to provide the most innocent explanation for their communications if asked to testify.

A Reuters review of the complaint found that at least a quarter of the 40 or so people referred to in the Justice Department complaint are still employed by S&P.

http://xfinity.comcast.net/articles/news-general/20130311/US-SP-LAWSUIT-RATINGS/

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The lawyers are getting rich on this and the government will most likely lose

Edited March 11, 2013 by Mr Smiley

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The lawyers are getting rich on this and the government will most likely lose

Regardless of who wins the case, the lawyers will make out like bandits