Credit Downgrade May Yield Ready-Made Fraud Defense

Law360, New York (August 10, 2011, 6:59 PM EDT) -- The broad-based stock sell-off triggered by Standard & Poor's Financial Services LLC's downgrade of American creditworthiness could provide public companies shelter from liability by making it tougher for plaintiffs in upcoming securities fraud class actions to prove loss causation, experts say.

Since S&P dropped the federal government's credit rating by one notch Aug. 5, the share value of thousands of public companies, already battered from the messy fight in Congress over U.S. debt and deficits that culminated with a deal signed by President Obama on Aug....
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