S&P Seeks Declaration That Credit Ratings Are Immune From Liability

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On February 5, two Standard & Poor’s entities filed a declaratory judgment action in the Southern District of South Carolina seeking to bar the South Carolina Attorney General from suing S&P under South Carolina’s Unfair Trade Practices Act in connection with S&P’s ratings of RMBS and CDOs. S&P filed the action in response to a December 20, 2012 letter from the Attorney General that threatened litigation. S&P alleges that its credit ratings are predictive and subjective opinions that constitute protected speech under the First Amendment. It seeks a declaration that South Carolina’s Unfair Trade Practices Act may not constitutionally be applied to S&P’s credit rating activities and an injunction prohibiting the Attorney General from pursuing any lawsuit that is inconsistent with S&P’s First Amendment rights. Complaint.

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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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