rating agencies

IOSCO Consults on Rating Agency Internal Controls

On May 25, IOSCO published a consultation report describing internal controls and procedures that rating agencies use to promote the integrity of the rating process and address conflicts of interest. IOSCO is seeking the views of stakeholders and rating agencies to assist it with further analysis of rating agency internal controls and procedures. Comments must be submitted by July 9. IOSCO Release. IOSCO Report.

FHLBP Claims Dismissed In Part

On November 29, 2010, Judge R. Stanton Wettick Jr. of the Court of Common Pleas of Allegheny County, in Pittsburgh, Pennsylvania, decided motions to dismiss three RMBS actions in which the Federal Home Loan Bank of Pittsburgh (FHLBP) alleged misrepresentations by various J.P. Morgan and Countrywide affiliates and three rating agencies (Moody’s, S&P and Fitch). The court dismissed all claims asserted against the rating agencies except for state law fraud claims. The court sustained a variety of claims against the J.P. Morgan and Countrywide defendants, however, and rejected their argument, relying on the Fifth Circuit’s decision in Lone Star Fund V (U.S.) v. Barclays Bank, PLC, 594 F.3d 383 (5th Cir. 2010), that the offering documents’ disclosure of a sole “repurchase or cure” remedy for non-conforming mortgage loans demonstrated that there was no misrepresentation. Decision.