Many forms of Regulation reform are currently being considered regarding Credit Rating Companies. In one person's view:
[A] better approach would be new legislation that makes clear that the ratings agencies owe the fiduciary duty of care and loyalty to their investor clients. That doesn't mean they can be sued any time an investment goes sour. What it does mean is that they would be liable if they put out a rating that they knew, or should have known, was misleading after taking reasonable steps to ascertain that the information provided to them was accurate.
Steven Pearlstein, "Missing the Mark on Ratings-Agency Reform" (Washington Post Online, Friday, September 18, 2009). This is well said. The Courts have also spoken well. They have imposed Fiduciary Duties recognized at Common Law in many respects on persons and entities in the position of Credit Rating Companies. These persons and entities have, however, often defended on the ground of immunity conferred by Congress and with a defense that their paid pronouncements are 'protected' by the First Amendment to the United States Constitution.
Perhaps against this background, new Federal legislation also imposing Fiduciary Duties may well be welcome in this area.
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