Connecticut Sues Rating Agencies For Deception

Connecticut Attorney General Richard Blumenthal said Wednesday he will take legal action against the three major rating agencies, which he accused of "deceptive and unfair practices."

AP

State Attorney General Richard Blumenthal holds a press conference in his office to announce plans to file a lawsuit against the U.S. Department of Education over the federal No Child Left Behind Act in Hartford, Conn., Monday August 22, 2005.

Blumenthal, who previously disclosed a wide-ranging investigation into the agencies, said the targets include Moody's, McGraw-Hill'sStandard & Poor's and Fimalac's Fitch.

Blumenthal will hold a press conference at noon EDT to discuss the findings, according to a press release. He said the rating agencies' actions cost taxpayers "millions of dollars."

Blumenthal in January said his office had issued subpoenas to all major rating agencies and bond insurers as part of an investigation into illegal practices surrounding the issuance of municipal bonds.

He said conflicts of interest among the various players could have resulted in "unnecessary and excessive charges" to taxpayers.

A spokesperson for S&P had no immediate comment. Representatives of Fitch and Moody's were not immediately available.