Shareholders in U.S.-listed companies can thank Standard & Poor’s for making them $1 trillion poorer after the rating firm earlier this month lowered the grade on Treasury securities for the first time to AA+ from AAA. Now, some of the most experienced investors say the stock market losses make no sense.
Moody’s Corp. and Standard & Poor’s lost a bid for dismissal of fraud claims in a suit by investors claiming the companies falsely assigned inflated ratings to notes sold by Morgan Stanley that were backed by subprime mortgages.
The Dodd-Frank financial regulation law may require the federal government to spend almost $1 billion and hire or transfer more than 2,000 employees in the months ahead, according to the Government Accountability Office.
Moody’s Investors Service ’s demand that taxpayers indemnify it against lawsuits over ratings will be challenged by state and local governments that say the company is shunning legal responsibility for its work.