An international rating service that recently has downgraded the credit ratings of several nations is being probed by federal investigators from one of those countries, The Wall Street Journal reports .
Federal prosecutors from the U.S. Department of Justice have picked up the pace of scrutiny of Standard & Poor's mortgagebond ratings during the real-estate-based financial crisis that began in 2008. More than five former analysts with the New York -based service have been contacted by prosecutors during the past month, an intriguing development considering they had not heard from officials during the past 180 days. And they were told to expect follow-up visits after interviews lasting as long as three hours.
The probe is civil, the publication reports, and the thrust of the investigation is whether managers with the ratings service watered down company standards for gauging mortgage deals. Investigators also are looking into whether S&P practices were pursuant with its established criteria.
Standard & Poor's last week reduced the ratings on nine euro zone nations, including that of France, the bloc's second-largest economy . Germany hosts the region's top economy.
The credit service and Fitch Ratings late last year served notice about euro zone nations' credit ratings being under review.
Late on the first Friday of this past August, S&P pulled down the credit rating of the U.S. from an unblemished AAA. The service cited partisan bickering among political leaders as one reason for the rating being reduced to AA+.