Standard & Poor’s Ratings Services has reached a $125 million settlement with the California Public Employees’ Retirement System, or Calpers, to resolve a case involving inflated grades of residential-mortgage deals that later faltered, an article in The Wall Street Journal said.

The state Supreme Court ruled in September that Calpers could sue Moody’s and Standard & Poor’s for millions of dollars due to the high ratings they gave to investments that collapsed in 2007 to 2008.

The Calpers settlement will bring S&P’s total payout to resolve the latest round of crisis-era lawsuits to $1.5 billion.

Calpers also named Fitch Ratings and Moody’s Investors Service in the lawsuit. Fitch previously settled, though the pension fund will continue to pursue Moody’s, the people said. Moody’s wasn’t immediately available to comment.

"Numerous initiatives by legislators and regulators across the globe to regulate Credit Rating Agencies, including the enactment of the Dodd-Frank Act in 2010, have imposed new requirements addressing potential conflicts of interest and procedures to protect the integrity and transparency of rating methodology. The Company and S&P Ratings take compliance with regulatory obligations very seriously and continue to make investments in people and technology to strengthen controls and risk management throughout the organization," Standard & Poor’s said in response to its recent lawsuits.