Alison Frankel: Chicago judge okays AG suit vs S&P. Bad omen for rating agencies?
This has not been a good week for Standard & Poor's. Stock in S&P's parent company, McGraw Hill, took a dive Monday after an Australian judge ruled that S&P is liable to ABN Amro for its misleading ratings of collateralized debt obligations. On Wednesday morning in federal court in New York, rating agency nemesis Shira Scheindlin -- the U.S. district judge presiding over two institutional investor fraud cases against the agencies and Morgan Stanley -- agreed to reconsider some previous rulings in favor of the defendants. And then Wednesday afternoon, a state court judge in Chicago ruled that Illinois Attorney General Lisa Madigancan proceed with her claim that S&P engaged in deceptive business practices when it told the investing public that its ratings of complex structured finance products were objective and independent.