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2013-02-04 — washingtonpost.com

The Justice Department is preparing to file a civil lawsuit against the ratings agency Standard & Poor's that will allege the company gave its seal of approval to toxic investments at the heart of the financial crisis, according to the company and people briefed on the case.

The lawsuit would mark the government's first federal case against one of the country's big ratings firms, which have been blamed for playing a major role in causing the meltdown on Wall Street. The Justice Department has faced years of criticism from watchdog groups and some on Capitol Hill who have questioned why it has been slow to pursue those responsible for the crisis.

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Initially the Justice Department and S&P attempted to reach a settlement, but talks broke down, according to two people familiar with the matter. A lawsuit may be filed as soon as this week and several state attorneys general are expected to join the case, the people said.

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