Standard & Poor's Ratings settled with the government, 2 states on mortgage-backed bonds

MarketsAssociated Press

Ratings company Standard & Poor's will pay $77 million to settle with the U.S. government and two states to resolve an investigation into mortgage-backed securities.

The company says that it has also settled with the attorneys general of New York and Massachusetts to resolve investigations into the same issue.

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The Securities and Exchange Commission had accused S&P of fraudulent misconduct in its rating of some mortgage-backed securities.

Under the terms of the settlement announced Wednesday, S&P will pay the Securities and Exchange Commission $58 million and $19 million to the states of New York and Massachusetts.

S&P also agreed to take a "time out" from issuing rating on certain types of mortgage-backed securities for a year, the statement said.