Shareholder Lawsuit Vs Moody's Allowed To Proceed

Shareholder Lawsuit Vs Moody's Allowed To Proceed - 2/23/2009 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

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Shareholder Lawsuit Vs Moody's Allowed To Proceed
Martha Graybow

Reuters. February 23, 2009
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EXCERPT: A lawsuit accusing Moody's Corp (MCO.N: Quote, Profile, Research) of misleading shareholders about the independence of its credit ratings business may go forward, a federal judge ruled in court documents made public on Monday. The judge rejected attempts by the rating agency to dismiss the case, which accuses the company and CEO Raymond McDaniel of securities fraud. But the judge did narrow the lawsuit, and threw out claims against former Moody's Investors Service Chief Operating Officer Brian Clarkson and Michael Kanef, the company's chief regulatory and compliance officer. The judge, Shirley Wohl Kram of U.S. District Court in Manhattan, said the plaintiffs -- a group of Moody's shareholders led by the Teamsters Local 282 Pension Trust Fund and two individuals -- could try to revive the dismissed claims by refiling them in a different form. Moody's, in a statement, said the ruling was "preliminary" and not one on the lawsuits's merits. "Although we are disappointed that the court did not dismiss the lawsuit entirely, we recognize that it is very difficult to prevail on a motion to dismiss ..." the company said. "We are pleased that the court still recognized many flaws in this lawsuit and dismissed a substantial part of the case." Ira Press, an attorney for the Moody's shareholders, said that most of the claims in the lawsuit were allowed to proceed and that the plaintiffs were reviewing whether to try to get the dismissed claims reinstated. Rating agencies have been blamed by critics for helping to foment the U.S. subprime mortgage meltdown by giving high ratings to subprime-linked securities that later disintegrated. The raters also have been criticized as being too close to issuers who foot the bill for their ratings.

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