The state has filed a lawsuit in Ada County District Court against Standard & Poor's, saying the credit rating agency broke state consumer-protection laws. The lawsuit claims the agency broke those laws while underplaying the risks of subprime mortgage securities.

The state says Standard & Poor's should have to pay up to $5,000 of civil penalties for each violation, plus remedies such as returning any ill-gotten gains.

Standard & Poor's is one of three major credit rating agencies for the public-financing bond market. It gives bond issuers — including the state of Idaho and its municipalities — a rating that is based on its analysis of the bonds' financial risks. It also rates securities such as those related to subprime mortgages. Investors can use that rating to help determine whether they want to buy the bonds, and how much they want to pay for them.

The rating agency acted in "misleading, false and deceptive" ways between 2001 and at least 2011, according to the lawsuit, which was filed Tuesday by Idaho Attorney General Lawrence Wasden. The agency claimed to be independent and objective when rating certain structured securities, when in fact it would "cater to large, frequent clients" who shopped around for the most favorable ratings, the lawsuit said.

Standard & Poor's tried to maximize its revenues and its market share by changing how it rated securities, so that it could provide high ratings, the lawsuit said. Idaho alleges that the securities that weren't properly rated "are often included in mutual fund and pension fund portfolios that play significant roles in the retirement and investment strategies of many individuals, including citizens of Idaho."

The lawsuit comes as the U.S. Department of Justice is pursuing its own lawsuit against the rating agency. The federal government alleges violations similar to those in the Idaho lawsuit, saying that Standard & Poor's contributed to the financial crisis. That lawsuit seeks $5 billion or more in damages.

Standard & Poor's issued a statement in response to the federal lawsuit and lawsuits filed by states including Idaho. It called the allegations "meritless" and "unwarranted."

"Unfortunately, S&P, like everyone else, did not predict the speed and severity of the coming crisis and how credit quality would ultimately be affected," it said in the statement. The agency's "ratings were based on the same subprime mortgage data available to 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."

Wasden's office is asking for a jury trial.

Standard & Poor's is a subsidiary of McGraw-Hill Companies, which also is a defendant in the state's lawsuit.