Law suits arise when credit rating agencies, who judge the quality of bond or derivative issues, are considered the cause of investors’ loss of money.
Making it easier to sue will open a can of worms.
The First Amendment is supposed to guard free speech. That usually protects financial analytical reports. Including opinions on structured Investment vehicles or SIVs, or derivatives, or any form of corporate and municipal bond.
A question arises in relation to an underwriting involving credit opinions, where investors lose money. As they did in the past financial meltdown.
Can analysts and their employers be sued for malpractice if their opinions have been wrong? Or are they covered by the First Amendment? What does any court decision do to those who evaluate due diligence in the future?
A move is on to sue credit agencies for alleged malpractice.
An eventual decision against them will adversely affect all analyst legal positions and considerations in the future.
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