S&P to face legal challenge from councils
Ratings agency Standard Poor’s has failed to avoid a legal battle with 91 councils, church groups and charities over investments that went bad during the global financial crisis.
The Federal Court has denied the agency’s leave to appeal a decision made in May that rejected SP’s argument that the claim against it be set aside.
The group of councils and charities first pursued legal action against SP in April 2013, due to its involvement in applying AAA ratings to complex investment products sold by Lehman Brothers before the GFC.
The Federal Court had seven months earlier ruled in favour of the councils, church groups and charities in their claim against Lehman Brothers.
SP has argued the claim against it be set aside as it was an abuse of process, had no prospect of success, and in any case the agency should not be required to submit to the Australian courts.
The legal battle between SP and the councils, church groups and charities is likely to begin in 2015.
Source: skynews
