Ratings Services Lose Bid to Dismiss Investors’ Suit

Sept. 2 (Bloomberg) -- A federal judge rejected a request by Moody’s Investors Service and Standard & Poor’s to dismiss a lawsuit accusing them of deceiving investors in rating private placement notes.

U.S. District Judge Shira Scheindlin in New York dismissed an argument by Moody’s and Standard & Poor’s that their opinions were protected by free-speech rights. She said the First Amendment of the U.S. Constitution doesn’t apply in the case because the companies’ comments were distributed to a select group of investors and not to the general public.

Without ruling on the merits of the case, the judge also said opinions by the ratings companies may be the basis for a lawsuit “if the speaker does not genuinely and reasonably believe it or if it is without basis in fact.” The judge said that there are enough facts alleged against the two companies for the lawsuit to go forward.

The lawsuit was filed by Abu Dhabi Commercial Bank and King County, Washington. Scheindlin dismissed all claims against Bank of New York Mellon Corp.

Edward Sweeney, spokesman for Standard & Poor’s in New York, declined to immediately comment.


http://www.bloomberg.com/apps/news?pid=20601087&sid=ayRA.3NqMsow

Free speech rigths ???? ROFLMAO !!!

 

This could be a watershed lawsuit.

If the ratings companies lose, or this even makes it to a jury, it will threaten the solvency of these companies (as they're scum who were stamping everything triple A plus, no matter what kind of crap it was).

 

Kind of like MAI appraisers in real estate. The joke was that MAI really stood for Made As Instructed.