Bear Stearns Liquidators Allege Ratings Agencies Ran Scam

Law360, New York (November 12, 2013, 3:45 PM EST) -- Two Bear Stearns & Co. Inc. hedge fund liquidators sued Standard & Poor’s, Moody’s Investors Service Inc. and Fitch Ratings Inc. on Monday in New York Supreme Court, saying they artificially boosted securitized debt ratings, causing the funds to lose more than $1 billion after the housing market crashed.

In their complaint, liquidators Geoffrey Varga and Mark Longbottom cited internal communications reported by the Wall Street Journal in 2008 to back up their claims that the agencies fudged their ratings, including a text message “it could...
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