Officials are investigating the ratings that Standard & Poor’s gave to dozens of mortgage-backed securities in the lead-up to the financial crisis of 2008.

The U.S. Justice Department launched the investigation this week, the New York Times reported Wednesday, citing three unnamed sources.

The inquiry is focusing on several instances where S&P analysts apparently wanted to downgrade the rating on any given security but were overruled because of the objections of other managers within S&P.

The implication is that the agency is not completely impartial and doesn’t grant unbiased opinions on debt and securities in cases where doing so might impact another aspect of their business.

In a statement to CBC News, the ratings agency said they have received several requests from different government agencies over the last few years regarding U.S. mortgage-related securities.

"We have cooperated and will continue to cooperate with these requests," spokesperson Ed Sweeney said. "Analytic independence and objectivity have always been core principles of our ratings process."

S&P and its two major rivals, Moody’s and Fitch, made billions over the past decade by being paid to rate the credit-worthiness of securities. They often gave their highest rating, AAA, to securities that have since proven to be anything but worthy.

Conflicts of interest

The industry works on a number of payment systems, but the one that is most common is the issuer-pay model, where companies and governments that want to borrow money pay one of the credit-rating agencies to rate them.

Critics say the system is riddled with conflicts of interest, since the rating agencies might anger customers they wish to do future business with if they slap poor ratings on their securities.

Some banks paid as much as $100,000 for ratings on mortgage bond deals, according to the Financial Crisis Inquiry Commission.

News of the investigation comes on the heels of Standard & Poor's downgrade of U.S. government debt in early August, which set off a chain reaction of market turmoil. Some are accusing the Justice Department, too, of having hidden motivations in launching their investigation at this time.

The Justice Department has the power to bring forward a criminal case, but it’s believed the investigation would lead to civil charges, if any.

With files from The Associated Press