S&P Loses German Appeals Court Ruling Over Lehman Ratings
Standard & Poor’s Financial Services LLC, a unit of McGraw-Hill Cos. (MHP), lost a German appeals court ruling over whether it can be sued in the country for its ratings of Lehman Brothers Holdings Inc. (LEHMQ)
The Frankfurt Higher Regional Court overturned a ruling from a lower court that blocked the lawsuits in April, said Ingo Noehre, a spokesman for the appeals court. A German pensioner is seeking compensation for 30,000 euros ($40,000) over losses on Lehman certificates.
“The lower court now has to rehear the issue and cannot deny jurisdiction for the same reasons,” Noehre said. “Whether S&P is liable for damages in the end wasn’t at issue in today’s ruling and needs to be determined by the lower court.”
Rating companies have come under fire for their alleged failure to foresee the financial crisis and for granting top rankings to mortgage bonds that fell in value after home-loan defaults. Investors brought cases in Germany after a U.S. court ruled the ratings companies can’t be held liable because their ratings are protected speech.
Philippa Melaniphy, a spokeswoman for Standard & Poor’s in London, declined to immediately comment.
To contact the reporter on this story: Karin Matussek in Berlin at firstname.lastname@example.org
To contact the editor responsible for this story: Anthony Aarons at aaarons@Bloomberg.net.