Ohio court dismisses pension fund case against ratings agencies
A U.S. District Judge in Ohio dismissed a multimillion-dollar suit filed against Standard & Poor's, Moody's Investors Service and Fitch Ratings over ratings on residential and commercial-mortgage backed securities, ruling the agencies were giving opinions without any proof of fraudulent intent. Judge James Graham with the District Court for the Southern District of Ohio Eastern Division dismissed a case filed by five Ohio state pension funds, including the Ohio Police & Fire Pension Fund, the Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio, the School Employees Retirement System of Ohio and the Ohio Public Employees Deferred Compensation Program. The plaintiffs claim they used credit ratings to decide what investment vehicles would be safe and ended up losing $457 million on MBS-related investments. The plaintiffs allege S&P violated the Ohio Securities Act and is guilty of negligent misrepresentation. The court dismissed the suit saying in court documents "their ratings were predictive opinions and, absent specific allegations of fraudulent intent or of a duty to the Ohio funds, the agencies cannot be held liable for alleged negligence in their methodologies." Write to Kerri Panchuk.