On Oct. 25, AST Court issued judgment re credit rating firms, costs.
AST Court issued judgment ACN 117 641 004 Pty Ltd (in liq) v S&P Global, Inc (no 3), regarding an application for further security for costs; further security was ordered.
This judgment is re proceedings from 2020 and 2021 respectively, re credit ratings class action; involves numerous parties i.e. a trustee (in liq) of cash management fund, City of Cockburn (Australia), a Cayman-incorporated firm, several US S&P firms.
Judge said it is common ground between the parties that the applicants’ claims (if successful) potentially run into the hundreds of millions, if not billions, of AUD.
Judge's Orders on Further Security
Security of AUD 987k ordered against gainst First Vale Applicant in Vale Proceeding.
In addition, AUD 1.34mn ordered against the Basis Applicants in Basis Proceeding.
Judge's Comments on Both Proceedings
Judge explained that both proceedings are complex; they are presently listed for final hearing before him for a period of eight weeks commencing on Jun. 30, 2025.
Although differences between the proceedings, there are also commonalities.
Judge explained that it is common to both proceedings that the applicants make allegations of fraud as against S&P in relation to the development of multiple versions of credit default models in order to assist in rating complicated financial products.
It is also common ground that the events the subject of both proceedings occurred over a number of years approximately twenty years ago, and the persons involved in the development of the models in question are principally located overseas.
Judge said it is plain that nature and subject matter of the proceedings are such that substantial costs are being incurred on all sides; it is also plain that amendments to pleadings in the proceedings have occasioned further costs to be incurred.
He said he is satisfied that S&P has established basis for a grant of further security and that it is warranted having regard to the costs brought about by the amendments.
Regulators
AST Court; Lawsuit
Entity Types
Corp; CRA; Fiduciary; Inv Co; Muni
Reference
LR [2024] FCA 1238, NSD 881/2020, NSD 73/2021, 10/25/2024
