In re Moody's Corporation Securities Litig., No. 07 civ. 8375 (S.D.N.Y. Mar. 31, 2011) (Daniels, J.)

Investors in stock of the ratings agency Moody's brought this putative class action pursuant to Sections 10(b) and 20(a) of the '34 Act, alleging that Moody's made material misrepresentations and omissions when it assured investors that it was unaffected by any conflicts of interest in its "issuer-pays" rating business model and that it lied about its consideration of loan originator standards in rating mortgage-backed securities. The Court denied plaintiffs' motion for class certification, finding that individual issues predominated on the issue of reliance. The court found that plaintiffs were not entitled to the fraud-on-the-market presumption of reliance because defendants proved there were no statistically significant stock price movements in response to the relevant alleged misstatements or corrective disclosures. Decision.