S&P says US government's lawsuit is "retaliation"

This file photo shows 55 Water Street, home of Standard & Poor's, in New York. (AP Photo/Henny Ray Abrams, File)

September 3, 2013 2:30:08 PM PDT
Standard & Poor's says the U.S. government sued the ratings agency as "retaliation" for its downgrade of the country's credit rating.

The Department of Justice filed civil charges against the rating agency in February and is seeking $5 billion in penalties.

The government claims S&P refused to warn investors that the housing market was collapsing because it would be bad for business. It also says S&P knowingly inflated ratings of risky mortgage investments that helped trigger an economic crisis.

S&P denies the claims and said in a court filing that it is being sued in retaliation for a downgrade of the country's top-tier credit rating in 2011.