Federal Judge Dismisses Suit Against Moody’s and Standard & Poor’s

February 23, 2010 by · Leave a Comment
Filed under: The Rating Agencies 

U.S. District Judge Lewis Kaplan dismissed claims against Moody’s Corp and Standard & Poor’s in litigation over nearly $100 billion of Lehman Brothers Holdings Inc. mortgage-backed securities.

Investors had accused the agencies of having misled them by disregarding ratings guidelines and having a conflict of interest. They claimed that the agencies had rated mortgage-backed securities that they had helped to create and structure.

Reuter’s news service quotes Joshua Rubins of Satterlee Stephens Burke & Burke LLP, the law firm representing Moody’s, “The judge has obviously agreed with the arguments that we made that the ratings agencies have never been held to be potential defendants under these provisions and it was a distortion of the statute to try to bring claims against the ratings agencies.”

The judge’s rationale is not yet available. A written ruling is expected.

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