AUGUSTA, Maine — Maine Attorney General Janet Mills said Tuesday morning that her office has filed a lawsuit against Standard & Poor’s Financial Services LLC over the agency’s mortgage bond ratings in the run-up to the 2008 financial crisis.

The state joins the U.S. Department of Justice, which filed a suit against S&P late on Monday, and several states pursuing legal action against the company, a subsidiary of McGraw-Hill Cos. Inc.

Mills told the Bangor Daily News on Tuesday that her office has worked with investigators at the Justice Department and other states for months to develop the case against the company.

Maine’s complaint, filed Tuesday morning in Kennebec County Superior Court, alleges that S&P violated the Maine Unfair Trade Practices Act by engaging in unfair and deceptive business practices in the rating of certain complex finance securities before the financial crisis, and “operated with an inherent conflict of interest, prioritizing profits over objective ratings,” according to a statement from Mills’ office.

Mills stressed that Maine’s complaint is separate from the suits filed by the Justice Department and other states, and that S&P will need to answer specifically to the state’s complaint under the Maine Unfair Trade Practices Act.

“Whether they file a very similar answer in this state and other states, I can’t say,” she said.

She said Maine may have an advantage because under its unfair trade practices law, the state doesn’t need to prove an actual monetary loss. It only needs to prove the company used deceptive business practices that affected Maine investors, she said.

The Justice Department complaint, as well as Maine’s, is based on the fact S&P was paid by banks and other financial institutions to rate their financial products, creating what the plaintiffs claim was conflict of interest where S&P was encouraged to rate products despite not having the necessary expertise to do so.

S&P “knew its analytical models could not adequately assess these complex securities but that it continued to rate the products anyway, often awarding them the highest and safest rating of AAA,” a statement from Mills’ office said.

Maine’s complaint claims S&P’s misconduct began as early as 2001, reaching its zenith between 2004 and 2007, and continuing into 2011.

“The mutual funds and pension funds of Maine residents, retirees and workers were adversely impacted by S&P’s misconduct,” Mills said in the statement. “The company promised independence, competence and objectivity, but what it provided were inflated ratings engineered to drive S&P’s profits at the expense of investors.”

S&P “derives substantial revenue from its business in the state of Maine,” according to the complaint.

When asked how much revenue S&P obtained from Maine investors, Mills said her office did not have a firm number.

“We just know investors in Maine, like investors everywhere, and state institutions, like state institutions everywhere, have relied on S&P ratings in order to make investments,” she said.

Mills said S&P was the target of a lawsuit, rather than rating agencies such as Moody’s and Fitch Ratings, because of its stature in the financial sector.

“More people would rely on Standard & Poor’s because it’s been around the longest and it’s the biggest,” she said.

Maine’s complaint argues that S&P violated three elements of the Maine Unfair Trade Practices Act: That it misrepresented itself in terms of its objectivity and the expertise needed to analyze complex financial tools; that it misled Maine investors, directly or indirectly, by failing to disclose its conflict of interest in rating these financial tools; and that it created unfair conditions where Maine investors relied on supposedly independent analysis when making investment decisions, which “is likely to cause substantial injury that is not reasonably avoidable by consumers and is not outweighed by countervailing benefits to consumers or competition.”

Maine’s lawsuit asks the court to require S&P to stop making misrepresentations to the public; to change the way the company does business; impose as much as $30,000 in civil penalties, one for each violation of the Maine Unfair Trade Practices Act; and the return of “any ill-gotten gains that it obtained by virtue of its unfair and deceptive acts,” according to the complaint.

Mills said the “ill-gotten gains” could equal hundreds of millions of dollars. She said there’s no plan yet as to how that money would be distributed among the states if the court rules against S&P.

S&P on Monday said it will “vigorously defend” itself against the Justice Department’s lawsuit.

“A DOJ lawsuit would be entirely without factual or legal merit,” S&P said in a statement Monday. “It would disregard the central facts that S&P reviewed the same subprime mortgage data as the rest of the market — including U.S. government officials who in 2007 publicly stated that problems in the subprime market appeared to be contained.”

Other states filing similar lawsuits are Arizona, Arkansas, California, Connecticut, Delaware, Idaho, Iowa, North Carolina, Missouri, Pennsylvania, Tennessee and Washington, as well as the District of Columbia.

Whit Richardson

Whit Richardson is Business Editor at the Bangor Daily News. He blogs about Maine business, entrepreneurs and the economy.