While suing Standard & Poor’s for fraud, states from New Jersey to California ironically are helping fund the world’s largest credit rater’s legal defense by requiring that their pension funds use its rankings.
JPMorgan Chase & Co., the largest U.S. bank by assets, is weighing whether to ban traders from using electronic chat rooms to communicate with peers at other firms as the forums draw scrutiny from global regulators, according to a person with knowledge of the matter.
McGraw Hill Financial Inc.’s Standard & Poor’s unit, Moody’s Corp. and Fitch Group Inc. were sued by the liquidators of two Bear Stearns hedge funds, who accused them of issuing ratings they knew were bogus.
Fitch Ratings Ltd. settled negligence claims brought by the California Public Employees’ Retirement System’s over ratings it gave structured investment vehicles that later collapsed, agreeing to provide Calpers with documents from a similar lawsuit pending in New York.
U.S. Securities and Exchange Commission inspectors said a large credit-rating firm’s procedures “appeared to allow” for a pending rating decision to be disclosed to certain people before the action was publicly announced.