Wall Street knew before the financial crisis that highly rated mortgage-backed securities were problematic. According to Michael Lewis' book "The Big Short," everyone close to the situation — including the rating agencies — knew that the mortgages that were bundled into those horrible securities were not just "flawed," they were garbage. Time cannot reduce the smell.
And what's this about Standard & Poor's having the freedom to express its opinion? Should PricewaterhouseCoopers not be held responsible for a bungled audit in which it renders a reckless opinion on the financial statements of a company?
Yes, S&P is responsible and should be liable.
Gary M. Barnbaum
It is doubtful that the credit rating agencies would disappear altogether, no matter the outcome of the lawsuits against them. I would hope that one result of litigation would be to bar these agencies from being paid by the entities they rate, which could easily create a conflict of interest.