Real Estate & Property Law
Ohio AG: Major Credit Agencies ‘Sold Out’ in Toxic Mortgage Mess
Posted Nov 20, 2009 4:35 PM CDT
By Martha Neil
As federal elected officials and administrators mull potential regulatory reform to rein in lenders accused of causing a mortgage meltdown nationwide, the attorney general of Ohio has stepped into the breach and filed a federal lawsuit against the three largest credit rating agencies, Reuters reports.
They created a financial crisis, contends Attorney General Richard Cordray, by looking out for their own short-term financial interest and providing false and misleading Triple A ratings on toxic mortgage debt that cost pension funds for state employees a bundle of money.
"The credit rating agencies sold out, and they sold us out," the attorney general says of Standard & Poor's, Moody's Investors Service and Fitch Ratings. "They traded in their objectivity, and in exchange received massive profits."
A representative of one of the three defendants declined to comment, but spokesmen for the other two said the lawsuit filed today in federal court in Columbus, Ohio, lacks merit, the news agency reports.
The attorney general "appears to be seeking new scapegoats for investment losses incurred during the unprecedented market disruption," states Michael Adler, speaking on behalf of Moody's.