Negligent Misrepresentation and Rating Agencies

Gerard Magliocca

Gerard N. Magliocca is the Samuel R. Rosen Professor at the Indiana University Robert H. McKinney School of Law. Professor Magliocca is the author of three books and over twenty articles on constitutional law and intellectual property. He received his undergraduate degree from Stanford, his law degree from Yale, and joined the faculty after two years as an attorney at Covington and Burling and one year as a law clerk for Judge Guido Calabresi on the United States Court of Appeals for the Second Circuit. Professor Magliocca has received the Best New Professor Award and the Black Cane (Most Outstanding Professor) from the student body, and in 2008 held the Fulbright-Dow Distinguished Research Chair of the Roosevelt Study Center in Middelburg, The Netherlands. He was elected to the American Law Institute (ALI) in 2013.

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2 Responses

  1. “That negligent “clean bill of health” led another firm to extend a loan that went bad.”

    Just a pet peeve of mine but the audit report is not a “clean bill of health” – rather that the accompanying financial statements adequately reflect a company’s financial status IAW certain reporting standards.

    Nothing in it opines as to the overall “health” of the company (except perhaps by omission; no “going concern” comment) – that is for the user to decide.

  2. Lawrence Cunningham says:

    Interesting idea, though Cardozo’s Ultramares opinion is now a minority position, with the Restatement (Second) of Torts, Section 552, representing the majority stance, allowing negligent misrepresentation claims by third parites whom the supplier intended to benefit from the opinion or knows its recipient will supply it to. On the other hand, there has been considerable pressure from the auditing profession to curtail that stance, including by urging to recognize as enforceable auditor-client contracts disclaiming or reducing the scope of auditor liability for negligence.