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

Orrick - Finance 20/20
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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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