On March 20, the Appellate Division, Fourth Department, of the Supreme Court of New York affirmed in part and reversed in part the lower court's denial of Defendant Moody Investor Services, Inc.'s motions to dismiss two actions filed against it arising out of credit ratings Moody's assigned to CDO certificates. The court held that Plaintiffs' fraud claims were sufficiently pled because, although Moody's credit ratings were statements of opinion, not fact, Plaintiffs adequately alleged that Moody's did not believe its opinions when it issued the ratings. The court held that the trial court erred, however, in denying Moody's motion to dismiss Plaintiffs' negligent misrepresentation claims because Plaintiffs failed to plead that a special or privity-like relationship existed between Plaintiffs and Moody's and failed to adequately allege that Moody's knew the CDOs would be marketed to Plaintiffs. Opinion.
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