Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

S&P loses landmark Australian court case on complex product ratings

S&P loses landmark Australian court case on complex product ratings

Ratings agencies across the globe could come under legal pressure after Standard & Poor’s lost a landmark Australian court case on the ‘misleading’ way it rated complex financial products just before the credit crunch.

S&P, along with ABN Amro, were sued by 12 New South Wales councils which claimed the misleading conduct cost them more than $16 million.  The councils had invested in constant proportion debt obligations (CPDOs), which lost around 90% of their value during the crisis.

The Federal Court ruled that S&P was ‘negligent’ and Justice Jayne Jagot said no competent ratings agency should have given the products such high ratings.

The implications of the 1459-page decision could be wide reaching and could draw in rival ratings agency Fitch and Moody’s. The UK, USA, New Zealand and Netherlands are expected to launch similar lawsuits against S&P.

According to reports S&P plans to appeal and dismissed ‘any suggestions our suggestions were inappropriate’.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Big City Bright Future

Big City Bright Future

Big City Bright Future, the brainchild of BlackRock, is a three-week work experience programme for school leavers looking to forge a career in the City.

Play Kames' Ennett: Trump good for US high yield, but beware Europe

Kames' Ennett: Trump good for US high yield, but beware Europe

Kames Capital’s head of high yield David Ennett believes the changing political landscape will be a positive for the US, but negative for Europe in 2017.

Play Philip Milburn: why inflation won't run out of control

Philip Milburn: why inflation won't run out of control

Kames bond fund manager views inflation as more of 'scare' than a 'problem' and is positioning his portfolios accordingly.

Read More
Your Business: Cover Star Club

Profile: change is the only constant for Quilter Cheviot

Profile: change is the only constant for Quilter Cheviot

This is not the first time we have profiled David Miller, but at the time of his previous appearance his company looked very different.

Wealth Manager on Twitter