Rating Agencies Win Dismissal of Claims They Misled Ohio Investors on ABS Quality

Credit rating agencies cannot be sued under the Ohio Securities Act for allegedly inflating their ratings of residential and commercial mortgage-backed securities purchased by five state investment funds, the U.S. District Court for the Southern District of Ohio ruled Sept. 26 (Ohio Police & Fire Pension Fund v. Standard & Poor’s Financial Services LLC).

Judge James L. Graham dismissed actions under the OSA for primary and secondary liability against Standard & Poor’s Financial Services LLC and other nationally recognized statistical rating organizations as well as a claim for negligent misrepresentation.

The complaint stemmed from 308 separate investments ...