ABN Amro Bank NV v Bathurst Regional Council: Credit Rating Agencies and Liability to Investors

Credit rating agencies perform the role of gatekeepers in the financial industry, particularly when investment products become increasingly complex. In a case the first of its kind, the Federal Court of Australia imposed liability on Standard & Poor's for significant losses sustained because of its negligent and misleading credit rating of a highly complex structured financial product. The decision informs the content of the responsibility of credit rating agencies to investors who heavily rely on their expert opinions as to the creditworthiness of financial products. The decision is likely to have an impact on similar litigation around the world and on the direction of financial regulation in this context.