Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
Paul, Weiss Obtains Dismissal of Complaint Against Fitch, Inc.
Practices
On September 26, Judge James L. Graham of the United States District Court for the Southern District of Ohio dismissed all claims brought by the Ohio Attorney General against our client, Fitch, Inc., and two other national credit rating agencies in Ohio Police & Fire Pension Fund, et al., v. Standard & Poor's Financial Services, LLC, et al.
The Ohio Attorney General brought suit on behalf of five state investment funds, seeking to recover over $450 million in losses in over 300 different investments in residential and commercial mortgage-backed securities following the financial crisis in 2007 and 2008. The Ohio funds alleged that they bought the securities in reliance on the defendants' credit ratings and that those ratings were false and negligently assigned. The complaint asserted claims for violations of the Ohio Securities Act and for common law negligent misrepresentation.
Adopting the arguments presented in our motion to dismiss, the court dismissed the complaint in its entirety. The court dismissed the Ohio Securities Act claims because the rating agencies were not sellers of the securities at issue, as required for liability under the statute and dismissed the negligent misrepresentation claims because the credit ratings at issue were statements of opinion, not statements of fact, and, therefore, were not actionable on a negligence theory.
The Paul, Weiss team included, among others, litigation partner Martin Flumenbaum.