On May 4, 2012, a United States District Court in New York, held that Credit rating agencies may have a duty under New York law to give accurate ratings to subprime-mortgage-backed securities targeted for sale to to a select group of buyers in private placements.
In June 2007, IKB Deutsche Industriebank AG (“IKB”), a German banking institution created Rhinebridge, a so-called “structured investment vehicle” (“SIV”) that was allegedly secretly loaded with toxic subprime mortgages. Morgan Stanley & Co., operated as a Co–Arranger and placement agent for Rhinebridge, and through marketing materials provided potential investors with the allegedly misleading ratings, accompanying definitions of the ratings, and statements regarding the Senior Notes’ safety and stability. Additionally, the following creadit agencies falsely stamped the SIV’s securities with a tripple-A rating to lure institutional investors: Standard & Poor’s Rating Services (“S & P”), Moody’s Investors Service, Inc. (“Moody’s”), and Fitch, Inc. (“Fitch”).
“Structured investment vehicles” are special purpose entities that borrow money by issuing short- and medium-term debt, and then use that money to buy longer-term securities including mortgage bonds and other asset-backed securities. The notes that SIV investors purchase typically receive very high or “investment grade” ratings from Rating Agencies ...Zum vollständigen Artikel