Credit rating agencies dug their own graves

Credit rating agencies, including S&P, Moody's and Fitch, may try to hide behind the First Amendment to avoid investor lawsuits over their failure to sniff out problems that culminated in the financial crisis. However, moves by the SEC and Congress may soon make this legal dodge much more difficult.

The credit rating agencies essentially take the position that they are no different than a news organization and that their ratings are reported for public consumption. Connecticut Attorney General Richard Blumenthal doesn't buy it. As he told The Wall Street Journal, "The very nature of [rating firms] so-called speech is very different from the classic First Amendment-protected expression. It's much more akin to an advertisement that misstates the price of an item on sale than a political candidate on a soapbox."