S&P near USD 1 bn deal to settle US subprime suit: source

Standard & Poor's has agreed to pay USD 1 billion to settle US charges that the ratings agency defrauded investors ahead of the housing bust, a person familiar with the matter said today.
The accord is in the final stages of negotiation and is expected to be announced by the end of the first quarter, the person said.
The settlement would resolve a 2013 US Department of Justice suit accusing the ratings agency of misrepresenting as safe high-risk securities linked to subprime mortgages.
The US argued S&P's ratings of the securities were too positive because it sought to win business from investment banks packaging the toxic mortgage-linked bonds that were at the heart of the 2008 financial crisis.

S&P initially contested the suit, accusing the Justice Department at one point of attacking the ratings firm as payback for a move by S&P in August 2011 to strip the US of its triple-A credit rating. The Justice Department denied the allegation.