Regulatory-reform legislation and a fraud case that advanced to the discovery stage could mean big problems for credit rating agencies. A judge dismissed claims by Moody's Investors Service and Standard & Poor's that their ratings were editorial opinion and protected by the First Amendment, allowing a fraud case against them to move forward. Meanwhile, regulatory-reform legislation being debated by the Senate would increase liability for rating firms. John Coffee Jr., a professor at Columbia University, said the legislation "could well drive credit agencies out of structured finance."
Published in Brief: