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The U.S. Department of Justice brought a civil
fraud lawsuit against S&P in 2013, accusing it of inflating
ratings to win more fees from issuers, and then failing to
downgrade debt backed by deteriorating mortgage-backed
securities fast enough.
S&P, a unit of McGraw Hill Financial Inc <MHFI.N>, has claimed
the lawsuit was filed in retaliation for the downgrade, and
should be dismissed. Its main rating agency rivals, Moody's
Investors Service and Fitch Ratings, were not sued.
U.S. District Judge David Carter denied both Geithner's request
to set aside S&P's subpoena and a similar request made by the
Federal Reserve Bank of New York and Terrence Checki, the bank's
executive vice president.
"This incremental approach has the virtues of affording S&P an
opportunity to gather the information that it needs to defend
itself, while according due respect to the time and autonomy of
high-ranking executive officials," Judge Carter wrote in an
order on Tuesday.
Geithner is the highest former government official S&P has
pursued for information to support its allegations.
"As for any future depositions of Secretary Geithner or Mr
Checki, the court will cross that bridge when it comes to it,"
the court filing stated.
Jenni LeCompte, a spokeswoman for Geithner, did not immediately
respond to an email seeking comment. Representatives of the
Federal Reserve Bank of New York were not immediately available
for comment outside regular U.S. business hours.
Last month, Carter gave S&P access to Department of Justice
documents it had sought for its claim that the lawsuit may have
been in retaliation for its August 2011 decision to remove the
United States' "triple-A" credit rating.
He stopped short of giving S&P access to White House records
from that time, but said he would consider such a request later.
S&P has said Geithner angrily told McGraw Hill Chairman Harold
"Terry" McGraw in an August 8, 2011 phone call that he was
"accountable" for an alleged $2 trillion math error, and that
S&P's conduct would be "looked at very carefully.
The case is U.S. v. McGraw-Hill Cos et al, U.S. District Court,
Central District of California, No. 13-00779.
(Reporting by Supriya Kurane in Bangalore; Editing by Toby
Chopra)
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