A federal judge has unbundled lawsuits filed against ratings agency Standard & Poor’s Financial Services LLC by the attorneys general of 16 states and the District of Columbia, sending them back to the state courts in which they were filed.
The ruling was a win for the states, which allege that S&P’s ratings of mortgage backed securities before the 2008 financial crash were not objective or independent as promised because the agency was obtaining lucrative fees from investment bank clients. S&P, owned by McGraw Hill Financial Inc., previously had removed the cases to federal court, where they were pending before U.S. District Judge Jesse Furman in the Southern District of New York.
