2012 HomeWorld
Middletown High School Orchestra
Theatre Guild's "Wittenberg"
Home > Blogs > Ohio politics > Archives > 2009 > November > 20 > Entry
Ohio pensions sue ratings agencies
Ohio’s public pension systems are suing Standard & Poor’s, Moody’s and Fitch - companies that provide credit ratings for investments.
The lawsuit, filed by Attorney General Richard Cordray in U.S. District Court, alleges that the three credit rating agencies wreak havoc on U.S. financial markets by providing unjustified and inflated ratings for mortgage-backed securities in exchange for lucrative fees.
“The rating agencies were central players in causing the worst economic crisis in Ohio since the Great Depression. The rating agencies assured our employee pension funds that many of these mortgage-backed securities had the highest credit ratings and the lowest risk,” Cordray said in a written statement. “But they sold their professional objectivity and integrity to the highest bidder. The rating agencies’ total disregard for the life’s work of ordinary Ohioans caused the collapse of our housing and credit markets and is at the heart of what’s wrong with Wall Street today.”
The agencies gave triple A ratings and assured the pension funds and others that the investments were extremely safe, the lawsuit alleges. But the misleading ratings cost Ohio’s pension funds more than $457 million, the suit said.
The McGraw-Hill Companies, Inc., which owns Standard & Poor’s, said, “We believe the claim has no legal or factual merit and we intend to defend ourselves vigorously against it. A recent SEC examination of our business practices found no evidence that decisions about ratings methodologies or models were based on attracting or losing market share.”
The pension systems collectively hold $186 billion in investment portfolios and represent 1.7 million workers, retirees and beneficiaries.
The lawsuit says that the rating agencies knowingly gave favorable reviews to the mortgage-backed securities in part because they received big fees from the same groups that they were supposed to be objectively evaluating.
Cordray said the lawsuit is an attempt toward holding Wall Street accountable for its wrongs.
Permalink | Comments (12) | Post your comment |
Comments
By Buy Ambien
April 5, 2010 10:54 AM | Link to this
newton agrees symbol negates inches licenses compassword catalant alongside owner captured
By Buy Ambien
April 5, 2010 9:24 AM | Link to this
upadhyaymca allotted storesiwoz rigorous austriatel schering heimeriks frameworks reportthe recipients laser
By Common Sense Investor
November 22, 2009 6:08 PM | Link to this
The rating agencies may have not done their jobs, but the people managing these accounts were paid six figure incomes to know one investment from another and allocate risk accordingly. They did a p**s poor job of it the last ten years and the results have proven they didn’t know what they were doing. These ingrates should sue themselves. The same goes for most mutual fund managers, 95% of whom underperform the indexed funds.
By kurt
November 20, 2009 4:46 PM | Link to this
Pension plans were created as another means of tax-free capital for the RICH man,with the workers protection as a mere guise.This country was,is,and always will be run by professional LIARS—-once this was recognized by the public,these liars banded together and called themselves republicans.
By opie
November 20, 2009 1:30 PM | Link to this
To all you government worker wannabes, if you think the job is so great, apply. Just remember, your career can end in a minute if you have a poor driving record; if you fail your annual physical; if you grow facial hair; if you fight your spouse; if you fail any alcohol or drug test; if you are injured and cannot return to work in a reasonable time; etc. Private employers will cut you a break on most of these actions. And if you do make it to retirement, expect to pay $1,200 per month for health insurance!
By Dave
November 20, 2009 1:10 PM | Link to this
Hey Jerry grow up i am sick of hearing your crybaby butt!!! This is not the state’s or Governments money paying for it. Its the workers no body seems to care about the state workers when times are good.And your making more money than public employees and getting more money in your 401k than we can think about.so set down and shut up crybaby
By Jonald
November 20, 2009 1:07 PM | Link to this
Very true Sam Adams, but it was Greenspan who prevented regulation of the derivative market.
By Sam Adams
November 20, 2009 1:00 PM | Link to this
A lot of blame is being thrown around for the banking meltdown, from greedy borrowers to greedy mortgage brokers to Alan Greenspan, but if you want the real culprit, it was the repeal of the Glass-Stegall Act. Because, on November 12, 1999, the Federal government under the Gramm-Leach-Bliley Act, drafted and passed by a Republican congress, and signed by William Jefferson Clinton, allowed commercial banks to merge with investment banks. And, there you have it, boys and girls!
By Jerry
November 20, 2009 11:42 AM | Link to this
It’s funny how the state is only worried about public pensions? My 401K tanked, 1/2 of its value. That is all I have to live on when I retire, sorry no government job here, no one to fight for my retirement. Waaa all the crybaby government employees out there. I’m so tired of hearing about your troubles.
By wiseacre in Ohio
November 20, 2009 11:00 AM | Link to this
The pension groups are trying to publicize fraud on the part of these credit rating groups. They are supposed to work like the independent ratings of the Consumers Guide—without the payoffs, kickbacks, and bribes from the companies they are rating. This “let’s cheat everyone to get rich and then cover it up” attitude of Wall Street, mortgage and banking companies, and other investment companies can only last so much longer. How can such cheats live with themselves?
By Patrick
November 20, 2009 10:51 AM | Link to this
How on earth is the Union at fault???..Im a proud union member…I took a pay cut to support my drowning pension…Don’t think we “unions”, got any free money either buddy…keep walking!!!
By Carl
November 20, 2009 10:29 AM | Link to this
Could,t be that the unions got greedy and wanted great returns in the face of a bad market. Now like all liberals say its someone elses fault. Give me some free money now.