Judge Dismisses Suit Against S&P Over Fannie Rating
July 19, 2013
A Manhattan federal judge earlier this month dismissed a class-action lawsuit against Standard & Poors Financial Services after finding no evidence that the rating agency defrauded investors when it gave a favorable rating to Fannie Mae stock prior to the financial crisis.The suit, filed in December 2012 on behalf of potentially hundreds of thousands of investors who bought stock in an offering by Fannie in May 2008, four months before the GSE was taken over by the government, alleged that S&P knowingly misrated Fannies stock. Valued at about $25 per share when it was issued, the stock dropped to about $3 per share after Fannies government conservatorship began in September 2008.