The Ratings Agency Wars Illustrate that the Landscape for Multi-Jurisdictional Litigation Can Quickly Change
The financial ratings agencies face major lawsuits all over the world for their roles in the financial fiascos of the late 2000s. This week highlighted how quickly that world can change, and the reality that legal results in other countries are now just a part of the mix of precedent followed by courts, and the harshest jury of all, investors.
The specifics? Alison Frankel's new post at On the Case provides the big picture, and links to rulings. For purposes of this post, her opening paragraph is pasted below because it provides the factual overview to support the big picture point about global impacts and quick changes:
"This has not been a good week for Standard & Poor's. Stock in S&P's parent company, McGraw Hill, took a dive Monday after an Australian judge ruled that S&P is liable to investors for its misleading ratings of collateralized debt obligations. On Wednesday morning in federal court in New York, rating agency nemesis Shira Scheindlin -- the U.S. district judge presiding over two institutional investor fraud cases against the agencies and Morgan Stanley -- agreed to reconsider some previous rulings in favor of the defendants. And then Wednesday afternoon, a state court judge in Chicago ruled that Illinois Attorney General Lisa Madigancan proceed with her claim that S&P engaged in deceptive business practices when it told the investing public that its ratings of complex structured finance products were objective and independent."