Bear Stearns Liquidators Brings Fraud Action Against Rating Agencies

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On July 9, the joint official liquidators of Bear Stearns & Co. Inc. filed suit against three rating agencies – Standard & Poors, Moody’s and Fitch – in New York state court over the agencies’ allegedly fraudulent investment ratings of RMBS and CDOs. The plaintiffs allege that the defendant rating agencies knowingly misrepresented information as to the independence and accuracy of their ratings, while purposefully omitting material information from their credit rating analyses. Plaintiffs bring a claim for common law fraud and seek over $1 billion in damages as well as punitive damages. Summons with Notice.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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