{"id":5364,"date":"2012-11-08T00:00:00","date_gmt":"2012-11-08T06:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2012\/11\/standard_poors_misled_investor"},"modified":"2022-04-28T13:41:19","modified_gmt":"2022-04-28T18:41:19","slug":"standard-poors-misled-investor","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/standard-poors-misled-investor\/","title":{"rendered":"Standard & Poor\u2019s Misled Investors By Giving Synthetic Derivatives Its Highest Ratings, Rules Australian Federal Court"},"content":{"rendered":"

A ruling by the Australian Federal Court against Standard & Poor\u2019s could give 13 NSW councils about A$30M in compensation for their about A$16M in synthetic derivative <\/a>losses. According to the court, the ratings firm misled investors by giving its highest ratings to complex investment instruments that ended up failing during the worldwide economic crisis. The councils can now claim compensation from S & P and co-defendants Royal Bank of Scotland (RBS)- owned ABN Amro Bank and the Local Government Financial Services, Ltd. The three had sold the councils constant proportion debt obligation notes, promoted as Rembrandt notes, six years ago.<\/p>\n

Specifically to this case, Australian Federal Court Justice Jayne Jagot said that Standard & Poor\u2019s took part in conduct that was \u201cdeceptive\u201d when it gave AAA ratings to constant proportion debt obligations that were created by ABN Amro Bank NV. The Australian townships were among those that invested what amounted to trillions of dollars in the CPDOs, as well as in collateralized debt obligations.<\/p>\n

The projected A$30M in compensation includes not just councils\u2019 losses, but also interest and costs. The councils are also entitled to receive compensation for breach of fiduciary duty from LGFS, which succeeded in its own claim against Standard and Poor\u2019s and ABN Amro for Rembrandt notes that it sold to its parent company after the notes were downgraded from their triple-A rating to triple-B+.<\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

A ruling by the Australian Federal Court against Standard & Poor\u2019s could give 13 NSW councils about A$30M in compensation for their about A$16M in synthetic derivative losses. According to the court, the ratings firm misled investors by giving its highest ratings to complex investment instruments that ended up failing during the worldwide economic crisis. 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