Thu, Mar 28, 2024
A A A
Welcome Guest
Free Trial RSS pod
Get FREE trial access to our award winning publications
Alternative Market Briefing

Moody’s to pay CalPERS record $130m to settle negligent subprime ratings

Thursday, March 10, 2016

Komfie Manalo, Opalesque Asia:

Ratings agency Moody's and Moody's Investors' Services have agreed to pay the California Public Employees' Retirement System (CalPERS) a record $130m to settle its erroneous ratings of "AAA" rated structured investment vehicles prior to the financial crisis.

CalPERS sued Moody's and other rating agencies in 2009 after the pension fund sustained losses from investments in three structured investment vehicles that relied on the liquidity of assets that turned out to be illiquid, such as subprime RMBS, CDOs and other asset-backed securities. In the lawsuit, CalPERS alleged that Moody's made "negligent misrepresentations" by assigning the investments their highest credit rating. This caused significant losses as the market for structured finance securities collapsed in late 2007.

Matthew Jacobs, General Counsel for CalPERS, commented, "This resolves our lawsuit against Moody's and restores money that belongs to our members and employers. We are eager to put this money back to work to help ensure the long-term sustainability of the fund."

Early in 2015, CalPERS settled with defendant Standard & Poor's (S&P) for $125m, bringing total recovery from the now-concluded lawsuit to $255m.

In addition to obtaining a substantial recovery for investment losses, this case was path-breaking ......................

To view our full article Click here

Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. KKR raises $6.4bn for the largest pan-Asia infrastructure fund[more]

    Laxman Pai, Opalesque Asia: The New York-based global investment firm KKR has raised a record $6.4bn for its second Asia-focused infrastructure fund, underlining investors' continued appetite for private markets. According to a media release from the alternative assets manager, the figure top

  2. Bucking the trend, top hedge fund makes plans for a second SPAC[more]

    From Institutional Investor: SPACs aren't dead. At least not to the folks at Cormorant Asset Management. The life sciences firm, whose hedge fund topped its peers in 2023, is confident it will match the success of its first blank-check company. Last week, the life sciences and biopharma speciali

  3. Benefit Street Partners closes fifth fund on $4.7 billion[more]

    Bailey McCann, Opalesque New York: Benefit Street Partners has closed its fifth flagship direct lending vehicle, BSP Debt Fund V, with $4.7 billion of investable capital across the strategy. Benefit Street invests primarily in privately originated, floating rate, senior secured loans. The fun

  4. 4 hedge fund themes that are working in 2024[more]

    From The Street: A poor earnings report from Tesla (TSLA) has not hurt the indexes on Thursday. The decline in Tesla stock, which is losing its position in the Magnificent Seven pantheon, is more than offset by strong earnings from IBM (IBM) and ServiceNow (NOW) . In addition, the much higher-t

  5. Opalesque Exclusive: A global macro fund eyes opportunities in bonds[more]

    Bailey McCann, Opalesque New York for New Managers: Munich-based ThirdYear Capital rebounded in 2023, following a tough year for global macro. The firm's flagship ART Global Macro strategy finished the year up 1