In a victory for the nation’s largest public pension fund, a California state court judge recently ruled that a groundbreaking lawsuit against the nation’s three major credit rating agencies can proceed.
San Francisco Superior Court Judge Richard A. Kramer denied the rating agencies’ motion to have the case dismissed.
Berman DeValerio represents the California Public Employees’ Retirement System (“CalPERS”) in the suit, which seeks to hold the credit rating agencies accountable for issuing unjustifiably high ratings for risky structured investment vehicles. The lawsuit alleges that the agencies – Standard & Poor’s, Moody’s Investors Service and Fitch – gave “wildly inaccurate” ratings for three structured investment vehicles, or SIVs, causing more than $1 billion in losses.
“This is a very positive development for CalPERS, and we’re pleased the judge did not give credence to the rating agencies’ First Amendment and federal preemption arguments and will allow the case to go to discovery,” said Todd A. Seaver, one of the Berman DeValerio partners overseeing the case.
This was the second major hurdle the case has cleared in recent months. Last fall, a federal judge ruled that the defendants had improperly removed the case to federal court. The judge remanded the case to state court, where CalPERS had originally filed the lawsuit.
*In August 2017, our firm name changed to Berman Tabacco. Case references and content published before that date may refer to the firm under our prior name, Berman DeValerio.