CalPERS drops suit against Fitch Ratings
The country’s largest public pension fund, the California Public Employees’ Retirement System, has dropped a lawsuit against Fitch Ratings without receiving any monetary settlement.
The 2009 lawsuit in San Francisco County Superior Court accused Fitch and two other credit rating firms, Moody’s Investors Service and Standard & Poor’s Corp., of negligently misrepresenting the financial strength of three so-called structured investment vehicles the companies rated.
CalPERS sank more than $1 billion into the three investment funds, which held mainly mortgage-backed securities and were hit with large losses after the U.S. economy began to collapse in 2007.
CalPERS said it was moving forward with the suit against Moody’s and Standard & Poor’s.
“Dismissal of the two Fitch defendants in the CalPERS complaint will streamline the litigation against two other credit rating agencies,” CalPERS said. “CalPERS can still fully recover its damages if it prevails against Moody’s or S&P, which will not be able to avoid liability through the Fitch dismissals.”
In a statement, Fitch said it “is pleased with the resolution of this case and the disposition reached with CalPERS,” according to Reuters.
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