New York Federal District Court Rejects Credit Rating Agencies' First Amendment Defense


In Abu Dhabi Commercial Bank v. Morgan Stanley & Co., Inc., 2009 WL 2828018 (S.D.N.Y. Sept. 2, 2009), the United States District Court Southern District of New York (Scheindlin, J.) held recently that First Amendment free speech immunity does not protect credit rating agencies from claims by investors “where a rating agency has disseminated their ratings to a select group of investors rather than to the public at large.” Although this is not the first decision to deny the rating agencies’ First Amendment defense when the opinion is not published to the “public at large,” it is one of the first decisions to reject the defense in the context of ratings of mortgage backed securities.

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