Friday, April 20, 2018
Editorials

It's right to hold Standard & Poor's feet to fire

The bankers responsible for the financial crisis, who packaged and sold subprime mortgage securities that turned out to be nearly worthless, didn't do it alone. Among their chief collaborators were the credit rating agencies whose job it was to objectively evaluate the risk to investors. Without these professionals slapping top AAA ratings on toxic subprime instruments, there wouldn't have been many investors. This central role is finally being held up to scrutiny in a $5 billion civil fraud case filed by the Justice Department against Standard & Poor's, one of the nation's three major credit rating agencies. Some justice could be on the horizon.

During the height of the 2008 crisis it became clear that trillions of dollars of junk securities tied to the American housing market had been rated as if they were financial gold and as safe as government bonds. That top rating was key to allowing institutional investors such as pension funds to buy them. The reason for the slipshod work comes down to one simple fact: backward incentives. The credit rating agencies are hired by the issuers of securities they are evaluating, not the investor looking for unbiased investment advice. Only by providing favorable ratings to their clients did they earn hefty fees.

The suit against S&P and its parent, McGraw-Hill Cos., accuses the company of a scheme to defraud investors by falsely representing that its ratings were objective. S&P's computer models were too optimistic in assessing the riskiness of subprime mortgage securities, and the models were manipulated by staff members to benefit clients, the suit alleges. S&P denies this, but S&P allegedly gave instructions to its employees to use a computer model with lower standards in cases where a transaction didn't pass using a more stringent model.

Encouragingly, the government stood firm when the company refused a settlement that included admitting to at least one count of fraud and paying a fine of $1 billion. The Justice Department went to court rather than let S&P off with a token wrist slap.

As the largest credit rating agency in the nation, S&P was counted on to look out for investors by providing unbiased risk assessments of financial instruments. The trumped-up ratings it delivered instead resulted in a financial mess so large that the economy is still recovering. Maybe this lawsuit will finally hold it to account.

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Editorial: When they visit Nature’s Classroom, kids are right where they belong

Editorial: When they visit Nature’s Classroom, kids are right where they belong

The Hillsborough school district planted a fruitful seed with the opening of Nature’s Classroom five decades ago on the cypress-lined banks of the Hillsborough River northeast of Tampa. • The lessons taught there to some 17,000 sixth graders each yea...
Published: 04/20/18
Editorial: Why single-member districts would be bad for Hillsborough commission

Editorial: Why single-member districts would be bad for Hillsborough commission

Anyone looking to make Hillsborough County government bigger, costlier, more dysfunctional and less of a regional force should love the idea that Commissioner Sandy Murman rolled out this week. She proposes enlarging the seven-member board to nine, e...
Updated: 10 hours ago
Editorial: Improving foster care in Hillsborough

Editorial: Improving foster care in Hillsborough

A new foster care provider in Hillsborough County is poised to take over operations in May, only months after its predecessor was fired for what was alleged to be a pattern of failing to supervise at-risk children in its care. Many of the case manage...
Published: 04/18/18

Another voice: Back to postal reform

President Donald Trump is angry at Amazon for, in his tweeted words, "costing the United States Post Office massive amounts of money for being their Delivery Boy." Yet in more recent days, Trump has at least channeled his feelings in what could prove...
Published: 04/17/18
Updated: 04/18/18
Editorial: Congress should protect independence of special counsel

Editorial: Congress should protect independence of special counsel

A bipartisan Senate bill clarifying that only the attorney general or a high-ranking designee could remove a special prosecutor would send an important message amid President Donald Trump’s attacks on the investigation into Russia’s inter...
Published: 04/16/18
Updated: 04/17/18
Editorial: Don’t fall for Constitution Revision Commission’s tricks

Editorial: Don’t fall for Constitution Revision Commission’s tricks

The Florida Constitution Revision Commission has wasted months as a politically motivated scam masquerading as a high-minded effort to ask voters to improve the state’s fundamental document. The commission on Monday added amendments to the Nove...
Published: 04/16/18
Editorial: Redner’s court win on medical marijuana sends message

Editorial: Redner’s court win on medical marijuana sends message

Florida regulators have done far too little to make voter-approved medical marijuana widely available for patients suffering from chronic illnesses. A circuit court judge in Tallahassee ruled last week there is a price for that obstruction, finding t...
Published: 04/15/18
Updated: 04/16/18
Editorial: Hillsborough commission should quit expanding urban area

Editorial: Hillsborough commission should quit expanding urban area

Any movement on modernizing local transportation is welcome, even small steps like the million dollars the state recently approved to design a Tampa Bay regional transit plan.But the region won’t make any progress on transportation, its single most p...
Published: 04/13/18
Updated: 04/18/18

Editorial: Fight harder on citrus greening

A new report by scientists advising the federal government finds no breakthrough discovery for managing citrus greening, a chronic disease killing Florida’s citrus industry. This should be a wake-up call to bring greater resources to the fight.The re...
Published: 04/11/18
Updated: 04/13/18

Editorial: Floridians should focus more on health

A new snapshot of the nation’s health shows a mixed picture for Florida and the challenges that residents and the health care community face in improving the quality of life.Americans are living longer, exercising more and doing better at managing th...
Published: 04/11/18
Updated: 04/13/18