"There is no one Congress is angrier at than the credit rating agencies," said Professor John Coffee of Columbia University, speaking last month at the opening session of the Professional Liability Underwriting Society's D&O Symposium.
The rating agencies have to this point been totally immune from liability, he reported. "They partly rely on First Amendment defense [and] more often rely on the difficulty of alleging scienter," he said, explaining that this hurdle to bringing securities cases requires investor plaintiffs to plead "facts with particularity giving rise to strong inference of fraud."
Suggesting a reason why they have so far escaped liability, Mr. Coffee said "rating agencies are quite divorced from issuers. They don't get up close and personal the way the auditor does."
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