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Connecticut AG to sue Wall Street rating firms

By Chris Rizo | Nov 25, 2009

Richard Blumenthal (D)

NEW YORK (Legal Newsline)--Connecticut Attorney General Richard Blumenthal said Wednesday e plans to sue the three major Wall Street credit-rating agencies over their alleged roles in the recent financial industry meltdown.

Blumenthal, a Democrat, said he plans to file lawsuits against Moody's Investors Service, Fitch Ratings and Standard & Poor's over their "negligent, reckless and incompetent work" in grading debt purchased by public pension funds.

The attorney general made his announcement in an appearance Wednesday on Bloomberg Television, a financial news network.

"We want money back for our taxpayers as a consequence of these misratings," Blumenthal said. "They gave AAAs to financial instruments that deserved much, much less. They were the enablers to this structured finance debacle."

A week ago, Ohio Attorney General Richard Cordray, also a Democrat, announced that his office had filed a lawsuit against Standard & Poor's, Moody's and Fitch in federal court on behalf of five Ohio public-employee retirement and pension funds.

Cordray, in his lawsuit, alleged that the credit-rating firms provided inflated ratings to mortgage-backed securities.

"The rating agencies were central players in causing the worst economic crisis in Ohio since the Great Depression. The rating agencies assured our employee pension funds that many of these mortgage-backed securities had the highest credit ratings and the lowest risk," Cordray said last week. "But they sold their professional objectivity and integrity to the highest bidder."

From Legal Newsline: Reach staff reporter Chris Rizo at

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