Somebody is finally doing something about those corrupt, self-serving companies that we all rely on to tell us just how risky this stupid bond is. Ohio is suing the ratings agencies.
With the Feds spitting the bit on regulating an industry that never saw a mortgage-backed security or collateralized debt obligation it didn't want to give a triple-A rating and that showed the most remarkable propensity for figuring things out right after the credit markets imploded, Richard Cordray, attorney general of the Buckeye State, is following the Andy Cuomo's lead and attacking Fitch Ratings, Moody's Investors Service and Standard & Poor's.
But where the N.Y.A.G. struck a deal, agreeing to end his probe if the agencies changed the way they made money from their MBS ratings, Cordray is suing, alleging that the all-powerful trio publishes "false and misleading ratings."
Specifically, Cordray, like Cuomo, is pissed about its MBS ratings, which he says cost five state pension plans more than $457 million. Of course, Ohio's pension plans aren't exactly a model of propriety, which should make for some entertaining "You're incompetent," "No, you're incompetent" exchanges on the stand should this mess ever reach a courtroom. Which is doubtful. Because there's nothing the all-mighty ratings agency likes less than having its integrity--yes, it still thinks it has some--called into question.
Ohio attorney general sues rating agencies [Reuters]