Rating Agency 1st Amendment Defense Weakened, Again

Posted by & filed under Rating agency litigation.

Federal District Judge O’Toole (D. Mass.) issued an Opinion and Order in Federal Home Loan Bank of Boston v. Ally Financial Inc. et al., No. 11-10952 (Sept. 30, 2013)  relating to the potential liability of S&P and Moody’s (the Rating Agency Defendants) for their ratings. The case “arises from the purchase of private label mortgage-backed… Read more »

Moody Misrepresentation

Posted by & filed under 2013, Class Action Litigation, Investor lawsuits, Rating agency litigation.

Judge Daniels (SDNY) granted Moody’s motion for summary judgment in In re Moody’s Corporation Securities Litigation, No. 07 Civ. 8375 (Aug. 23, 2013). This is a big win for Moody’s, but I did find the following passage striking in its tone: Moody’s own emphasis on the importance of its independence weakens its case for summary… Read more »

Round One to California in Suit Against S&P

Posted by & filed under 2013, Government lawsuits, Rating agency litigation.

California Superior Court Judge Karnow issued a Memorandum Order Overruling Defendants’ Demurrers in California v. The McGraw-Hill Cos. et al., CGC-13-528491 (Aug. 14, 2013 San Francisco County).   California Attorney General Harris alleged “that S&P intentionally inflated its ratings for the investments and that these knowingly false ratings were material to the investment decisions of… Read more »

What Was S&P Puffing?

Posted by & filed under 2013, Government lawsuits, Rating agency litigation.

I have been closely following DoJ’s suit against S&P since the complaint was filed in February (and see here, here and here).  DoJ alleges that S&P “issued or confirmed ratings that did not accurately reflect true credit risks” and seeks to obtain civil penalties pursuant to FIRREA. (4) Yesterday, Judge Carter issued a doozy of… Read more »

Reiss on Booming Structured Finance Litigation

Posted by & filed under Government lawsuits, Investor lawsuits, Rating agency litigation, Upstream litigation, Upstream litigation media coverage.

Law360 interviewed me about the boom in structured finance litigation arising from the Financial Crisis (here, behind a paywall): banks will not be able to let their guard down anytime soon, thanks to the U.S. Department of Justice’s rediscovery of a statute developed in response to the late 1980s savings and loan crisis and the… Read more »

Second Circuit Finds Plausible Claims of Widespread Misconduct in RMBS Offering

Posted by & filed under Investor lawsuits, Rating agency litigation, Upstream litigation.

The Second Circuit ruled in New Jersey Carpenters Fund v. The Royal Bank of Scotland Group et al. on a number of issues, but of interest to me are the sections dealing with allegations of misrepresentations. The Court writes that “numerous courts, including the First Circuit in Nomura, have concluded that misstatements of an underwriter’s… Read more »