Friday, May 07, 2010

California state pension system wil proceed with suit against major rating agencies

Karen Gullo reports on Bloomberg that a California state court has ruled that the California Public Employees Retirement System (CALPERS) can proceed with a suit against the three main ratings agencies: Standard and Poors, Moody’s Investors Service, and Fitch Ratings, link here

The suit for over $1 billion is for “wildly inaccurate” risk assessments and apparently for conflict of interest, an arrangement that ethically sounds a lot like the “insider trading” that used to put people on Wall Street in jail.

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