Oh, they'll get sued; that's a given. But will they (MCO, others) lose the lawsuits? I say MCO will prevail. MCO issues opinions. Just as their business competitors do. None of the competitors came to the correct opinion (evaluation) as far as I can tell. And there was no conspiracy. Or if so, how is that going to be proved?
Even if a company says they rely - solely or totally - on a rating agency for an opinion and that is the only measure of safety that these resource-rich, sophisticated companies (the JPM's, the mort. reits, all the banks who bought subprime) use, I do not see how the rating agency will have to pay $ to anyone of these who bought Subprime/Alt. just because the rating company issued in good faith, a rating which subsequently proved to be incorrect.
Yes, MCO got revenue and profit for issuing those opinions. I would like to see how someone could show that MCO purposely, illegally, and/or improperly issued ratings to drive that revenue, knowing that long-term, an intentionally false rating would come back to haunt them and ultimately cost more than any short-term benefit. Perhaps it is in the insider sales. I do not know. |
