Credit Rating Agencies' Accountability: Short Notes on a Global Issue

Financial Fraud: A Literature Review

“…Notwithstanding the fact that legal liability for misrepresentations in the context of structured finance investments rests primarily with the banks that securitized and underwrote these products, actors from outside the banks have been involved in these schemes as well. Attention has especially focused on the role played by the credit rating agencies (CRAs) in mortgage securitization fraud (Bussani, ; Dorn, ; Maas, ; Barak, ). In February 2013, the US Department of Justice filed civil charges against Standard & Poor's (S&P) for allegedly engaging in a scheme to defraud investors in RMBSs and CDOs.…”

“…Most of these claims allege that the agencies fraudulently inflated their ratings of structured finance investment products, and that the CRAs lied to investors about their independence and objectivity in the construction of those ratings. Academic scrutiny of the involvement of CRAs in securitization fraud has especially problematized the business model and limited accountability, especially in criminal law, of the CRAs (Bussani, ; Johansson, ; Cane et al ., ; Lehmann, ).…”

BRICS, a Multi-Centre “Legal Network”?

“…At present they are often subjected to assessment procedures and potential penalties, issued by entities that lack democratic legitimisation, and even by private entities. The "rating agencies" (Bussani, 2010;Pianesi, 2011;Nori, 2012;Pinelli, 2012) are the most clear example of this. For the BRICS countries then, the possibility of creating a new international monetary system no longer based on the International Monetary Fund, with its distinctly American trait, responds to another of the major issues opened by the global rights framework under construction and is an important issue in their agenda in both economic and financial terms, and in geopolitical and strategic one.…”