SYDNEY: A court decision in Australia yesterday cleared the way for 91 church groups, councils and charities to resume a damages claim against Standard & Poor’s over hundreds of millions of dollars they lost on synthetic derivatives.
Bentham IMF Australia, a publicly-listed company that funds large legal claims, filed a case on behalf of the groups last year over losses they suffered on investments rated AAA by S&P which were sold by Lehman Brothers prior to the global financial crisis.
The ratings agency applied to have the claim set aside on the grounds that it was an abuse of process, had no prospect of success and the US-based S&P should not be required to submit to the Australian courts. But Federal Court Justice Stephen Rares rejected all three arguments, clearing the way for the damages claim to proceed.
“From the beginning S&P has tried to delay and divert any attempt to bring it to account for losses suffered on products that it had no reasonable basis to provide its AAA ratings,” Bentham IMF executive director John Walker said.
“This application was one such delaying tactic but it has backfired badly. With the latest S&P roadblock removed, our clients now look forward to resuming their claim against S&P.” AFP
