Legal Spotlight: Rating agency exemption from litigation

Rating agencies’ exemption from litigation under securities law is under threat as claimants argue that the agencies acted more like underwriters than raters. There has been a flurry of class action and derivative lawsuits filed against credit rating agencies in response to the recent financial crisis. The focal point of this latest scrutiny has been the rating agencies’ involvement in packaging and rating complex financial instruments, including mortgage-backed securities and col

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