In February 2013, the US Department of Justice (DoJ) filed a $5-billion lawsuit against the S&P accusing it of deliberately inflating risky mortgage securities ahead of the 2008 global financial crisis. The ratings agency claimed that the DoJ lawsuit was filed in retaliation to S&P's downgrade of United States' investment rating from AAA to AA+ in 2011.
"Under the terms of the settlement, which is not subject to court approval, the Company will pay $687.5 million to the DOJ and $687.5 million to the States and District of Columbia," the press release, published on the McGraw Hill Financial website, reads.
In addition to being outside of judicial approval, all three deals reached Tuesday did not require the credit rating agency to admit to any wrongdoing.
"The settlement contains no findings of violations of law by the Company, S&P Financial Services or S&P Ratings," the press release said.
According to the US Securities and Exchange Commission (SEC), S&P had intentionally overestimated risky mortgage securities grades and was subsequently banned from grading bonds backed by commercial mortgages for one year.
S&P is the world's largest credit rating agency which, along with Fitch and Moody's, accounts for nearly 95 percent of credit ratings around the globe.
