Bell Nunnally Partner Jeffrey J. Ansley is quoted in the Law360 article “Calif.’s S&P Suit Heralds Bold False Claims Push.” The piece details California’s suit against Standard & Poor’s Financial Services LLC (S&P) accusing the service of inflating ratings on mortgage-backed securities in violation of the state’s False Claims Act. California Attorney General Kalama Harris asserts that the company’s rating system between 2004 and 2007 was illicitly tweaked such that major banks, who serve as one of the company’s major customers and revenue drivers, benefitted unjustly. The alleged inflated ratings, Harris claims, cost state financial vehicles such as pension funds nearly $1 billion dollars as they later proved to be far less valuable or stable than S&P’s ratings suggested.
Drawing on his experience in the financial fraud area, Ansley notes that the Federal False Claims Act and parallel state laws, such as California’s, are powerful tools since they allow treble damages to be sought on both paid and submitted claims. “[The False Claims Act] is far more punitive than many other statutes intended to prevent and deter people from submitting false claims to the government,” says Ansley.
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