Standard & Poor’s has asked a judge to dismiss the civil case filed against it by the Department of Justice. The DOJ filed the case on charges that the ratings agency inflated its ratings so that it could attract business during the mortgage investment boom.

S&P logo

Today DealBook reports that Standard & Poor’s called the basis for the complaint from the DOJ “isolated snippets” rather than real evidence. The case was filed in February, and it’s the first major case brought by federal authorities against Standard & Poor’s since the mortgage bubble burst. It claims that the rating agency purposely gave complex mortgage packages ratings that were higher than they should have had, which increased demand for mortgage securities, thus inflating the mortgage bubble until it finally burst, starting the financial crisis.

Lawyers for S&P said that the DOK’s complaint “overreaches” by targeting the agency. They said the agency’s inability to predict how bad the mortgage meltdown would be simply represents its lack of being able to predict the future. They also said that in order to have “a valid case,” the DOJ must show that S&P knew what the correct ratings should have been and gave higher ratings instead.

The DOJ said in its complaint that S&P called its ratings “objective, independent” and “uninfluenced by any conflicts of interest.” It then goes on to cover several conversations and messages which took place between 2004 and 2006 among analysts which the DOJ said demonstrate a lack of objectivity.

The next hearing in the case is set for May 20.

Standard & Poor’s is also trying to have over 12 fraud cases filed in various states combined and brought into federal court. The states which have filed suit are doing so under their individual consumer protection laws. The federal case requires a higher standard of proof.