S&P, Moody’s Win Dismissal of Claims Over Mortgage Securities
Standard & Poor’s and Moody’s Corp. won dismissal of a lawsuit seeking to hold them responsible for defrauding investors who bought about $100 billion of mortgage- backed securities. At a hearing yesterday, U.S. District Judge Lewis Kaplan in New York said he would dismiss claims against the rating companies, spokesmen said. Lehman Brothers Holdings Inc., which was alleged to have once owned the bonds that were sold, is bankrupt and isn’t a defendant in the case. Kaplan’s decision may have implications in other lawsuits pending against S&P and Moody’s in New York, California and other states. The judge said provisions of the securities law at issue in the case have never covered ratings companies, Moody’s lawyer James Coster said in an interview.