Originally Posted By: Derid

In other words, it was *fraud*.


It wasn't fraud according to the letter of the law. Why? Because there is no regulation/oversight into generating bond ratings, so they can just shrug and say "we tried our best" and move on. AFAIK, you STILL can label junk bonds AAA all day long and not go to jail over it.

System is suppose to be operating on reputation - you label things accurately, because your company's reputation is on the line, but it all fails when massive collusion happens and every rating agency/firm does it.

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