CalPERS, the biggest U.S. public pension fund, has sued Moody’s, S&P, Fitch for giving “wildly and unreasonably high” investment grades to securities that later suffered huge subprime mortgage losses.
The California Public Employees’ Retirement System said in a lawsuit filed last week in California Superior Court in San Francisco that it might lose more than $1 billion from structured…SIVs…
By giving these securities their highest ratings, the agencies “made negligent misrepresentations” to the pension fund, Calpers said. Such ratings…”proved to be wildly inaccurate and unreasonably high.”
Calpers, which seeks unspecified damages, had no additional comment on the suit, its timing or why no bank underwriters were named as defendants. Pension spokesman Clark McKinley acknowledged only, “there are a lot of potential targets that we have” in this matter.
All three agencies said they would seek to dismiss the complaint as soon as possible.
CalPERS has about $173 billion in assets and manages retirement benefits of more than 1.5 million Californians.
Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!
Leave a Reply