Community | October 29, 2009 | 11 comments

To Avoid Regulation, Credit Raters Hide Behind First Amendment Rights

source: http://www.huffingtonpost.com/2009/10/28/under-attack-credit-rater_n_337712.html

WakeUpPeople
For two decades, the nation's top credit rating agencies have managed to fend off a crackdown from Washington by relying on a surprising ally - the First Amendment.

Despite their key role in the most recent economic calamity, the three big bond raters--Standard & Poor's, Moody's and Fitch--seem poised to do it again. With help from two of the most storied constitutional lawyers in the country, the raters have successfully argued that when they make a mistake -- say, awarding the top triple-A grade to a multibillion-dollar bundle of bonds that later default -- they cannot be sued or held accountable.

That's because ratings are opinions, the agencies claim, protected by the constitutional right to free speech.

A Huffington Post Investigative Fund examination of court filings, congressional testimony and Securities and Exchange Commission documents illustrates how the companies have repeatedly invoked that right to free speech to dodge government regulation and court action. The raters have never lost a courtroom battle to a disgruntled investor, not even in the Enron scandal. Enron enjoyed high grades on its bonds just four days before it filed for bankruptcy in 2001.

Critics of the rating companies argue that they are misusing the Bill of Rights to protect a flawed but highly profitable business.
  1. groups:
    Community,   Current Tonight,   Exposing the Wrongs,   YWR
  2. tags:
    News,  First Amendment,  Credit Card Companies
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11 comments // To Avoid Regulation, Credit Raters Hide Behind First Amendment Rights // Video

  • RFIDemocracy
  • jubal
    • 0
      jubal  

    • Besides these slimy bastards, the legislation should go after credit reporting agencies as well. They often seem to be in cahoots with banks to manipulate credit markets and interest rates charged to consumers.

    • 2 years ago
  • KSirys
  • PressCore
    • 0
      PressCore  
    • KSirys:

      Wasn't Darth Sisious the Emperor Palpitine's AKA ? I just saw the History channel documentary on George Lucas' Star Wars prequel and sequel trilogies. It appears that Emperor Palpitine could do the Tesla thing and shoot lightening charges of electricity from his hands too like the evil character whose role Christopher Lee played. Interesting that George Lucas cast both Christopher Lee & Peter Cushing in his Star Wars saga. Both are from the Hammer Horror films of yesteryear. Peter Cushing played everthing from Dr. Frankenstein, to Van Helsing, to Sherlock Holmes. Christopher Lee is best known for his portrayal of Dracula. Maybe George Lucas is a fan of theirs and decided to honor them by casting them as Galactic evil doers.

    • 2 years ago
  • masterzip
  • neocongo
  • Incredulous
    • 0
      Incredulous  

    • Man, this guy looks like the Emperor after a couple of weeks on Ensure.

      Ever notice how it's always some scary-looking old white man defending this kind of crap?

      I bet he plays golf with Cheney. God knows nobody will hunt with Cheney anymore.

      Opinions and assholes, all protected by the First Amendment.

    • 2 years ago
  • DJMatt2
  • RFIDemocracy
  • Progresshiv
  • WakeUpPeople
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