Plaintiffs voluntarily dismissed the complaint with prejudice for all defendants. The case was closed on October 3, 2008 prior to the filing of a consolidated complaint.
On September 5, 2008 the court appointed Indiana Laborers Pension Fund as Lead Plaintiff and approved the union's selection of Lead Counsel.
On July 1, 2008 a law firm press released announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Southern District of New York on behalf of all U.S. citizens or residents who purchased Fimalac, S.A.
The complaint charges Fimalac and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Fimalac is a France-based international financial services company, providing financial ratings and enterprise risk management solutions.
Fitch Ratings, Ltd. ("Fitch"), a majority owned subsidiary of Fimalac, assigns credit ratings to structured finance transactions. The complaint alleges that, at the start of the Class Period, Fitch's core business practice of rating residential mortgage-backed securities ("RMBS") and collateralized debt obligation ("CDO") transactions was extremely profitable for Fitch, which enabled it to report strong growth, which, in turn, drove Fimalac's stock price to a Class Period high of EUR 80.98 per share on May 22, 2007.
According to the complaint, however, defendants failed to disclose to investors during the Class Period that: (i) the information upon which Fitch based its ratings of RMBS and CDOs was misleading and in many cases fraudulent; (ii) to continue to collect fees for its ratings, Fitch was applying lax standards or no standards at all when issuing its RMBS and CDO ratings; and (iii) Fitch was failing to monitor the credit quality of RMBS and CDOs after issuing its initial ratings, as Fitch was obligated to do, and many of these securities had deteriorated badly after Fitch had issued its ratings. Fitch is now under investigation by the New York Attorney General, the Connecticut Attorney General, the Ohio Attorney General and the SEC as a result of its practices of rating billions of dollars of securities without a reasonable basis for doing so and Fimalac's stock is trading at approximately 50% of its Class Period high.