FINALLY, THE LAWSUITS ARE COMING

(h/t Atrios)

The revelations about how the rating agencies sold junk as "AAA" are finally starting to lead to some big time lawsuits.

Ohio Sues Rating Firms for Losses in Funds
By DAVID SEGAL
Published: November 20, 2009
NY Times

Already facing a spate of private lawsuits, the legal troubles of the country’s largest credit rating agencies deepened on Friday when the attorney general of Ohio sued Moody’s Investors Service, Standard & Poor’s and Fitch, claiming that they had cost state retirement and pension funds some $457 million by approving high-risk Wall Street securities that went bust in the financial collapse.

Since the credit crisis began last year, dozens of investors have sought to recover billions of dollars from worthless or nearly worthless bonds on which the rating agencies had conferred their highest grades.

One of those groups is largest pension fund in the country, the California Public Employees Retirement System, which filed a lawsuit in state court in California in July, claiming that “wildly inaccurate ratings” had led to roughly $1 billion in losses.