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Australian ruling on S&P's liability for ratings will have global reach, say lawyers

Nov 06 2012 Nathan Lynch, Regulatory Intelligence

Australia has leapt to the forefront in the global quest to hold ratings agencies responsible for their "opinions", with the landmark ruling against Standard & Poor's over its rating of Rembrandt notes sending a legal and regulatory shockwave through the industry. Legal experts have said that the Federal Court decision will have global implications as the structured products at the centre of the case were sold to investors in other countries using the same rating. The litigation funder behind the matter, IMF (Australia), has already indicated that it will be looking to pursue similar cases based on the same legal principles in United Kingdom, United States, the Netherlands and New Zealand. The listed litigation funder said that the 1459-page decision from Justice Jayne Jagot will have an impact because the findings of a superior court in another country can set a legal precedent in another jurisdiction. In recognition of the implications of the decision for the ratings industry,

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