As a result of the U.S. Department of Justice's $1.38 billion settlement with Standard & Poor's Financial Services (S&P) in the mortgage-backed securities scandal, New Jersey will receive $25 million, and Pennsylvania and Delaware will each receive $21.5 million. S&P was one of the credit rating agencies that gave high ratings to worthless securities that were sold all over the world and resulted in the financial meltdown during the administration of President George W. Bush.
"On more than one occasion, the company's leadership ignored senior analysts who warned that the company had given top ratings to financial products that were failing to perform as advertised," said U.S. Attorney general Eric Holder. "As S&P admits under this settlement, company executives complained that the company declined to downgrade underperforming assets because it was worried that doing so would hurt the company's business. While this strategy may have helped S&P avoid disappointing its clients, it did major harm to the larger economy, contributing to the worst financial crisis since the Great Depression."
There was nothing in Holder's statement that indicated how the settlement money given to the states would be used. Many of those who were sold homes they could not afford, and then lost those homes when they couldn't pay the mortgage, have not recovered. Even though a number of financial institutions have been fined billions of dollars as a result of that scandal, many of those who were the initial victims of that scam have, for the most part, not been compensated.