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Lower court ruling stands in S&P ratings case

November 2, 2015

The Supreme Court of the United States won't hear an appeal from shareholders who claim the Standard & Poor's ratings firm made false statements about its ratings of risky mortgage investments that helped trigger the financial crisis.

The justices on Monday let stand a lower court ruling that threw out a lawsuit filed by the Boca Raton Firefighters & Police Pension Fund against S&P's parent company, McGraw-Hill.

A federal appeals court ruled 2-1 that statements about the integrity and credibility of S&P's credit ratings used routine, generic language that did not mislead investors.

The shareholders argued that false statements regarding a central aspect of the company's business were enough to violate federal securities laws.

Separately Monday, the court turned away an appeal from a former Toronto stockbroker convicted in a multimillion-dollar securities fraud who said federal prosecutors should have turned over documents that might have helped his defense.

Justices let stand an appeals court ruling that said prosecutors didn't have to share information about the drug use of a key witness against George Georgiou. The lower court sided with prosecutors who said defense lawyers could have discovered the publicly available records on their own.

Georgiou's lawyers said prosecutors had a duty to disclose the information if they were aware of it. Several former Justice Department officials backed his claim and urged the court to take the case. Georgiou was convicted on charges of manipulating markets of four stocks, causing $55 million in losses.
 

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