Davis Polk Advises McGraw Hill and Standard & Poor’s in Landmark Settlements with DOJ, States’ Attorneys General and SEC
2/4/2015

Davis Polk advised McGraw Hill Financial, Inc. (“McGraw Hill”) and Standard & Poor’s Financial Services LLC (“Standard & Poor’s”) in connection with their recently announced landmark settlement agreement with the U.S. Department of Justice (“DOJ”), and the Attorneys General of 19 states and the District of Columbia. Under the terms of the agreement, McGraw Hill and Standard & Poor’s agreed to pay a total of $1.375 billion, half of which will be paid to the DOJ and the other half of which will be paid to the states and the District of Columbia. The settlement resolves several lawsuits filed by the DOJ, the states, and the District of Columbia in the wake of the financial crisis concerning Standard & Poor’s Ratings Services’ ratings of residential mortgage-backed securities. In addition, McGraw Hill reached a separate $125 million settlement with the California Public Employees' Retirement System to resolve its claims regarding ratings on three structured investment vehicles.

The Davis Polk litigation team was led by partner Angela T. Burgess and included associates Nicholas N. George, Sagar K. Ravi and Antonio M. Haynes. The corporate team was led by partner Joseph A. Hall and included associate Julia Lapitskaya. Employment advice was provided by partner Kyoko Takahashi Lin. Tax advice was provided by partner Neil Barr and counsel Craig A. Phillips. Members of the Davis Polk team are based in the New York office.

Davis Polk also advised Standard & Poor’s Ratings Services, a nationally recognized statistical rating organization, on its January 2015 settlement agreements with the U.S. Securities and Exchange Commission (“SEC”) and the New York and Massachusetts Attorneys General. These settlements related to various enforcement actions brought by the SEC and the New York and Massachusetts Attorneys General concerning Standard & Poor’s Ratings Services’ approach to rating commercial and residential mortgage-backed securities. Pursuant to these settlements, Standard & Poor’s Ratings Services paid a total of $58 million to the SEC, $12 million to New York, and $7 million to Massachusetts.

 The Davis Polk litigation team included partners Linda Chatman Thomsen, Angela T. Burgess, and Antonio J. Perez-Marques, and associates Alicia Llosa Chang, Nicholas N. George, Stefani L. Johnson, Matthew A. Kelly, Rachelle Navarro, Antonio M. Haynes, Patrick Moroney, Molly Greer Gurny and Vanish Grover. The corporate team included partner Joseph A. Hall and associate Julia Lapitskaya. The financial institutions team included partners Lanny A. Schwartz and associates Jeffrey T. Dinwoodie and Scott D. Farbish. Employment advice was provided by partner Kyoko Takahashi Lin. Tax advice was provided by partner Neil Barr and counsel Craig A. Phillips. Matthew Wiener was the legal assistant on both matters. Members of the Davis Polk team are based in the New York and Washington DC offices.

 Cahill Gordon & Reindel acted as co-counsel to McGraw Hill Financial, Inc., Standard & Poor’s Financial Services, and Standard & Poor’s Ratings Services in connection with these matters.