The state of Arizona will get $21.5 million from a settlement between Standard & Poor's and the federal government, 19 states and the District of Columbia.
McGraw Hill Financial, the parent of the ratings agency, has reached a settlement it hopes will lay to rest formal debate about its role in the housing collapse.
Under the deal, McGraw Hill will pay $1.5 billion in settlements to the Department of Justice and the other parties involved, including Arizona, along with $125 million to California’s Public Employees’ Retirement System.
The federal government had claimed S&P began a scheme to defraud investors in 2004 that lasted until October of 2007.
It filed suit claiming the ratings agency inflated credit ratings and misrepresented the risks associated with securities and collateralized debt obligations to grow its revenue and market share.
State Attorney General Mark Brnovich said Arizona’s share will be used pay a variety of expenses connected to the case.
“That money is supposed to be used for attorney fees, reimbursing the state for the cost of the litigation, restitution for victims, remediation and also for consumer protection purposes," Brnovich said.
S&P did not admit any fault in the settlement, but Brnovich said when companies artificially inflate credit ratings to boost their bottom line, they’ll face justice.