lol Allstate isn’t the only one suing the banks who sold them toxic garbage so is Blackrock, MBIA, the New York Fed, even the GSE’s.
Back when ratings agency’s were paid by the buyer’s but the banks took that over and now days the sellers/banks pay the ratings agencies so of course they rated the crap as AAA.
It does not matter who is suing on the same basis as Allstate.
And, it does not matter what Fitch, S&P and others said about an investment.
I worked for a non-profit pension and insurance outfit for over 20 years. We had our own internal investment department. At no time could our chief investment officer have kept his job his people made a really bad investment and his answer had been that the custodian bank, our brokers and the ratings outfits all said it was good. Our board would have asked: didn’t we do our own due diligence?
I remember leaving very late one night and finding our fixed-investment manager was still there. I asked him why so late. He said he was looking over some “bond offerings” and developing an answer for the chief investment officer as to how we should rate them. I asked him were there not outfits like Fitch & S&P that could do that, and does not our custodian bank and our brokers have an opinion?
He agreed that was true, but added, that, in his opinion, if your put twenty bond traders, Fitch, S&P, your bank, individually, in different rooms and asked them all to rate a bond you’d get twenty different answers. And, at the end of the day he, our fixed investment manager was the one who’s job was on the line.
Why didn’t Allstate do the same. They didn’t and that’s Allstate’s fault.
Many other institutions operated the same way, AND, just like my old pension fund, did not make the same mistakes that Allstate, and others made.
It is Allstate’s board members and senior officers that should be sued.