The U.S. government wants Standard & Poor's Ratings Services to pay more than $5 billion—roughly what its parent company has earned in the past seven years—for giving its seal of approval to bundles of subprime mortgages that eventually crumbled, costing investors billions and helping sink the economy.

The lawsuit, filed in a federal court in Los Angeles, represents the Justice Department's most aggressive move yet to try to hold accountable companies that were at the center of the financial meltdown. While banks and others have settled with the government and a settlement is possible in the S&P case, both sides indicated Tuesday that they were preparing for a long and costly legal fight.

William Black, a former regulator at the Federal Home Loan Bank Board, said U.S. officials seem "willing to push this case harder than with any financial-crisis case against a major bank."

The government's case relies heavily on emails and other communications that allegedly show S&P officials knew the housing market was collapsing but dragged their feet on downgrading hundreds of securities because executives worried the firm would lose business and anger clients.

In March 2007, an analyst sent colleagues song lyrics about the deteriorating market, set to the tune of the Talking Heads 1980s song "Burning Down the House," according to the government's complaint.