Standard & Poor’s has been hit with a $US5 billion lawsuit, accusing the ratings service of “defrauding investors” through its credit ratings prior to the global financial crisis.
No individuals were charged in the 119-page US Department of Justice lawsuit, filed late Monday in federal court in Los Angeles.
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“There was no fraud. The ratings that were issued were believed by the people who issued them. And that’s what the government has got to disprove,” S&P lawyer Floyd Abrams says.
Future Fund warns of future uncertainty
The Future Fund has warned of uncertain global economic conditions, despite reporting a strong 12.8% return.
Chief executive Mark Burgess attributes the strong result to a turnaround in world sharemarkets last year, with strong performances delivered across all of the fund’s asset classes.
However, he also raised concerns about the long-term fiscal environment in the US and the potential impact of central banks tightening monetary policy.
Macquarie sticks by investment banking unit
Macquarie Group has announced it anticipates a 10% lift in profits and that it will maintain its investment banking unit, despite recently announced losses and weak capital markets.
Meanwhile Shemara Wikramanayake, the head of Macquarie’s $330bn funds unit, played down the possibility of international bond markets declining.
“Yes, (in) the bond market, yields are going up a bit. Yields move inversely to prices and have been rising as investors sell down bonds as the global economic outlook improves,” Wikramanayake says.
“While there continues to be a huge amount of liquidity needing to be pumped into every major economy – it’s happening in the United States, Europe, Japan – it’s really hard to see the bond bubble bursting.”
The S&P500 was 1.18% lower at 1513.41. The Aussie dollar is up to US104.04 cents.