Bear Stearns Investors Target Ratings Agencies For $1B Loss

Law360, Los Angeles (July 17, 2013, 9:26 PM EDT) -- Two investors in Bear Stearns & Co. Inc. portfolios have accused credit ratings agencies of artificially inflating estimates of the performance of securitized debt, arguing the false ratings resulted in more than $1 billion in losses to their funds, according to a Monday filing in New York state court.

The investors, Stillwater Market Neutral Fund II LP and Karasel LP, placed bets on portfolios run by the now-defunct investment bank that claimed to buy collateralized debt obligations and residential mortgage-backed securities that were given high-grade, low-risk...
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