Illinois Attorney General Lisa Madigan filed a lawsuit yesterday against Standard & Poors, a leading credit rating agency. Madigan claims S&P exacerbated the housing bust through their AAA credit ratings to mortgage-backed securities, financial instruments that were underwritten by subprime mortgages. Madigan notes that S&P rated securities of its clients.

"S&P abandoned its principles and instead used every trick possible to give deals [and] high ratings in order to retain clients and generate revenue," the AG stated.

The lawsuit comes as Madigan and other state AGs work with the Obama administration and big banks to come to a "robo-signing" settlement.