Lawsuits by 16 U.S. states over S&P ratings ordered back to state courts
NEW YORK, June 3
NEW YORK, June 3 (Reuters) - A federal judge ruled that lawsuits by 16 U.S. states accusing Standard & Poor's of fraudulently inflating its credit ratings belong in state courts, rejecting the McGraw Hill Financial Inc unit's argument that they should stay in federal court.
Tuesday's decision by U.S. District Judge Jesse Furman in Manhattan is a setback for S&P, which faces a greater potential for multiple judgments, conflicting rulings and higher legal bills by having to defend against more lawsuits.
Furman ruled almost one year after the U.S. Judicial Panel on Multidistrict Litigation consolidated the cases before him, saying it would promote efficiency.
The lawsuits generally accuse S&P of inflating ratings on structured finance securities to win more business from issuers, even as it touted its ratings independence and objectivity.
Most were filed in February 2013, when the U.S. Department of Justice filed its own $5 billion lawsuit against S&P. That case remains pending in Los Angeles federal court. (Reporting by Jonathan Stempel in New York; Editing by Cynthia Osterman)