From our private database of 14,100+ case briefs...
California Public Employees’ Retirement System v. Moody’s Investors Service, Inc.
California Court of Appeals
172 Cal. Rptr. 3d 238 (2014)
Moody’s Investors Service, Inc., Moody’s Corporation, and The McGraw-Hill Companies, Inc. (the Rating Agencies) (defendants) assisted in forming three structured investment vehicles, also known as SIVs. The Rating Agencies were responsible for detailed research and risk analysis regarding these investment vehicles. However, the Rating Agencies also entered into an arrangement to receive fees based on the sales of these investment vehicles. The Rating Agencies assigned their highest rating, AAA, to the three structured investment vehicles. This rating represents the likelihood that someone investing in these investment vehicles would ultimately receive the expected return on the investment. The rating was published in the offering materials for these three investments, along with disclaimers of liability from the Rating Agencies. Very few public details were available regarding the composition of these investment vehicles. The California Public Employees’ Retirement System (CalPERS) (plaintiff) was the largest state public-pension fund in the United States. CalPERS had an institutional policy that limited investments to highly rated products. CalPERS invested in these structured investment vehicles. However, these investment vehicles ultimately collapsed and CalPERS lost hundreds of millions of dollars. CalPERS sued the Rating Agencies, alleging that the AAA rating was a negligent misrepresentation. The Rating Agencies moved to dismiss, but the trial court denied the motion. The Rating Agencies then appealed to the California Court of Appeals.
Rule of Law
Holding and Reasoning (Jenkins, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 218,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 14,100 briefs, keyed to 189 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.