Moody’s Investor Services Inc. and other rating agencies cannot be considered underwriters for their role in the structuring of securities transactions to achieve the desired ratings for issuing banks, the 2nd U.S. Circuit Court of Appeals has ruled.
Thus, the 2nd Circuit said Moody’s, Standard & Poor’s and Fitch Inc. cannot be held liable under the securities laws for giving top ratings to mortgage-backed securities in advance of the collapse of the housing market and the demise of Lehman Brothers.
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