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S&P to pay A$215 million to settle CDO ratings lawsuit

An Australian federal court Thursday revealed that Standard & Poor's and other companies had paid A$215 million ($157.2 million) to settle a long-running lawsuit alleging negligence in assessing the balance of risks attached to synthetic collateralized debt obligation vehicles that suffered losses during the global financial crisis.

A spokesman for S&P Friday said his firm had nothing further to add to its statement in March, when the settlement of the class-action lawsuit was reached, welcoming the conclusion of the last "significant litigation pertaining to our previous ratings actions" on CDOs.

The judge, in the ruling announced Thursday, found the gross settlement sum of A$215 million — equal to roughly 90% of the total value of claims, including interest and costs — to be "fair, reasonable and in the interests of group members."

However, he raised questions about the A$92 million from that sum paid to two outside groups that funded the litigation — Litigation Capital Partners and International Litigation Partners — which, together with $20 million paid to lawyers, left the claimants with less than 50% of the total A$215 million settlement.