Arkansas wins $21.5 million in suit against Standard and Poors | Arkansas Blog

Tuesday, February 3, 2015

Arkansas wins $21.5 million in suit against Standard and Poors

Posted By on Tue, Feb 3, 2015 at 2:26 PM

Arkansas will received $21.5 million as part of a $1.375 billion settlement of a suit against Standard and Poors Financial Services by 19 states, the federal government and the District of Columbia.

The suit was filed in 2013 over the rating service's alleged inflating of ratings of risky mortgage investments that were at the root of the financial crisis.

Attorney General Leslie Rutledge announced the award. The suit was brought during Attorney General Dustin McDaniel's tenure. The lead attorney for Arkansas was Jim DePriest, long-time leader of the office's consumer protection division, who was among those fired by Rutledge when she took office. He got a job as counsel to the Arkansas Correction Department.

One of the pending questions of the Rutledge administration is how active her office will be in class action litigation that produced a number of lucrative settlements for Arkansas

Here's a New York times rundown of the settlement.

The money will go into the attorney general's Consumer Protection and Education Fund, established by 2013 legislation (and a source of occasional friction over how McDaniel used the money, such as end-of-term handouts to Arkansas State University.) One state put the money into a pension fund. The terms will be part of a settlement in Pulaski Circuit Court over the state lawsuit in the case.

The attorney general's news release is here.

UPDATE: I put a question to the office about Rutledge's general view on participating in such suits. The response:

The Attorney General is committed to protecting the consumers of Arkansas and will continue to weigh each instance of consumer protection on its own merits. 

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