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U.S. credit raters set back on First Amendment: judge

Reuters – Fri, Nov 25, 2011 3:13 PM EST

By Jonathan Stempel

(Reuters) - A federal judge has said credit ratings are not always protected opinion under the First Amendment, a defeat for credit rating agencies in a lawsuit brought by investors who lost money on mortgage-backed securities.

The November 12 decision was a little-noticed setback for McGraw-Hill Cos' (NYSE:MHP) Standard & Poor's, Moody's Corp's (NYSE:MCO) Moody's Investors Service and Fimalac SA's (LBCP.PA) Fitch Ratings, which have long invoked First Amendment free speech protection to defend against lawsuits over their ratings.

These agencies had argued that the Constitution protected them from claims they issued inflated ratings on more than $5 billion of securities issued in 2006 and 2007, and backed by loans from former Thornburg Mortgage Inc and other lenders.

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http://finance.yahoo.com/news/U-S-credit-raters-set-back-rb-4270951352.html?x=0