California Attorney General Jerry Brown will make an announcement in San Francisco this morning that his office is beginning a probe into the role of credit rating agencies in the financial crisis.
According to Brown, during the peak of the housing boom, the agencies gave their strongest credit ratings to complex financial instruments including securities backed by subprime mortgages. The ratings made them appear as safe as government-issued Treasury bonds.
Brown said the credit rating agencies earned billions in revenue and worked behind the scenes with the same Wall Street firms that created the securities.
Brown will give more details later this morning at a news conference at the State Building in San Francisco.