Standard & Poor's reaches $1.5 billion settlement

Standard & Poor's will pay $1.5 billion to resolve litigation alleging that the ratings agency issued inflated grades on mortgage bonds before the 2008 financial crisis.

S&P will pay $687.5 million to the U.S. Department of Justice, and 19 states and the District of Columbia "will share a similar amount," The Wall Street Journal reports. The company also reached a separate $125 million deal with the California Public Employees' Retirement System (Calpers).

The U.S. government had alleged that S&P wittingly misled investors by claiming its mortgage bond grades were independent and objective, the Journal reports. The ratings' inaccuracy helped cause the financial crisis during the housing market's collapse. But S&P won't admit wrongdoing as part of the settlement, according to the Journal. —Meghan DeMaria

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