Justice prepares civil suit against S&P over grading of financial products before crisis

The lawsuit would mark the government's first federal case against one of the country's big ratings firms, which have been blamed for playing a major role in causing the meltdown on Wall Street. The Justice Department has faced years of criticism from watchdog groups and some on Capitol Hill who have questioned why it has been slow to pursue those responsible for the crisis.

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Initially the Justice Department and S&P attempted to reach a settlement, but talks broke down, according to two people familiar with the matter. A lawsuit may be filed as soon as this week and several state attorneys general are expected to join the case, the people said.