The Real Deal Miami

Judge dismisses suit against rating agencies

January 27, 2010 10:22AM

A U.S. District Judge dismissed a lawsuit yesterday against rating companies Standard & Poor and Moody’s that claimed the two groups were responsible for defrauding investors who purchased about $100 billion in mortgage-backed securities in the lead up to the market collapse, according to Bloomberg. The plaintiffs in the suit alleged that the ratings agencies had a conflict of interest in the bonds they evaluated, and that they had, subsequently, disregarded standard ratings guidelines when ranking the mortgage-backed securities. The ruling could have a wide-ranging impact on other lawsuits that are pending against the two ratings companies, including one in New York State. Moody’s lawyer James Coster said he’s optimistic over how this ruling could effect his company’s upcoming litigations. “It was a very good day for the ratings agencies,” Coster said of the dismissal.