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How Will DOJ Prove Its Case Against S&P?

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  • Description

    FBN’s Charlie Gasparino on the Dept. of Justice’s lawsuit against S&P.

  • Duration 4:51
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-- -- -- that some of my favorite traders about a lot of -- how the justice.

To prove its case but the big ratings house Standard and Poor's issued fraudulent stock ratings in the run up to the 2008 financial crisis Charlie Gasparino.

Has the very latest.

I wanna before -- didn't citizens of fascinating story having him do it you notice of subtle difference in the Dell deal.

When it comes to Microsoft they were supposed to put equity financing in the deal they only would get financing.

They're out there there until loans that they doing meant.

-- the money to do the deal this is this I you know I don't know what is now.

More reporting I was I will tell -- this foxbusiness.com.

Has a pretty interest in take on this right now.

About potentially micro -- risk averse to DL blowing up at some point to future that you can't take it at a private equity and make money.

Clearly is an issue they were gonna put equity financing every single person -- reported this story.

Thought it was equity financing -- the initial reports particularly was equity financing.

And its debt so.

-- it's weird you would think they'd want.

Upside if this thing comes out and you can sell it out and you know five years at Microsoft's up half a percent of adults see it as a negative that don't -- -- -- -- -- -- I'm -- -- -- That they did not put money -- output skin in this gain.

This is a long.

And that's key this was supposed to be stock anyway.

Foxbusiness.com.

Interest in the mafia does his alone.

And what I need zero these tactics to those loans -- like stocks because you know you can you basic control the company anyway -- -- -- If you if they -- -- -- anyway without getting into mafia with in my mind about my last name but.

That -- -- in Queens will be very only so you know what -- -- was talking Charlie sitting there saying who is this guy.

-- and that's -- but anyway.

Here's what the DOJ is -- argue it's going to be kind of an interest in case.

Because in the past Standard and Poor's and all the other rating agencies have been able to get away from sort of claims against them with a civil.

Like there's been regulatory actions against the big beast or your entire.

The entire defense.

And by the way this is not the first time they've screwed up the sub prime credit defense of AAA rating these horrible toxic and -- and they've done that at this Orange County member -- that blew up AAA and Orange County.

Our New York City back in the before the for the fiscal during the fiscal crisis right before the fiscal crisis in the seventies high ratings and in the often in the place goes up and I can do is millions of -- but has many many others.

What was their defense First Amendment that this is merely an opinion.

-- here's how the Justice Department panel is gonna go what that what they're gonna shows that listen.

They issued these conflicted ratings that violated their own corporate policies that we need the procedures.

Of issuing these ratings.

Was -- tomb of the of their internal policies and we rely on court precedent to show that once you don't follow your own criteria.

Guess what deep -- First Amendment defense fades away there's been court -- -- -- Supreme Court was their current year.

Here's the thing we had to clarkin on before the clarkin son Jason's decreased to work act stay -- -- -- you know two decades knows a lot about the internal workings.

It there's something about being inside the box an outside the box.

You're not supposed to be an integral part of the deal you're not supposed to be saying here's how you do the deal if you want X and I think.

And a lot of people think.

That -- S and p.'s own rules which say you supposed to be kind of an outsider and observer.

Allows you to issue an opinion as an observer.

They were such a part of the deal -- without a triple -- rating.

You can't issue a structural on the structured finance vehicles right the CBO's at all the stuff they are paying S&P to and they were gay all he learned.

Conflict of and they were telling them how to do it to get that triple -- and they were looking into -- reported a deal being an insider of the deal.

Is what Dick -- -- talked about that is of that's about to of their own internal criteria at least as addiction it's an interest in story.

I think.

That if this thing but man whose stock is getting crushed to get across -- the parent company we should point out that that has been the -- defense of all these rating agencies.

If that falls away.

They can't really reliant -- defense because of these guys -- constantly and they have this conflict of -- right they're paid by the people that -- rating.

The next thing you know you wouldn't be talking a lot more to -- -- Egan of Egan Jones.

Because that business model that has -- he has may go by the wayside and tools Kroll Kroll -- good time to come up with a different file form of rating where -- out of states can't happening we had a -- bring them back -- come back and have Meredith Whitney was trying to do ratings but I think of a kind of Muni bond -- got got.

That like yes.

Charlotte thank you very much -- done on a -- closing bell ringing in.

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