Is S&P to blame?

Federal and state prosecutors sued the credit rating agency Standard & Poor's this week for allegedly defrauding investors by giving inflated ratings to complex mortgage-backed securities that proved all but worthless after the housing bubble burst. The cases raise difficult questions about the freedom to express an opinion without being held liable if it's wrong. Nevertheless, it's worth exploring whether S&P and its rivals deliberately soft-pedaled how risky those securities were in order to boost their bottom lines.

February 6, 2013