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Standard and Poor's has made an eyebrow-raising motion to dismiss in response to the Justice Department's case against it. (Bloomberg) Essentially, the defense attacks the fraud claim against it by saying that S&P's advertising and promotional materials should never have been believed:
“By their nature,” however, “these kinds of statements are not actionable,” S&P’s lawyers contend. The promotional rhetoric amounts to “classic puffery,” the defense adds. “Such statements are too general to serve as the basis of a fraud claim.” A “reasonable investor” would not rely on the statements in deciding whether to trust S&P’s ratings, according to the agency. In other words: Only a sap would believe the nice things we say about our work.
To follow the logic then: if we claimed that we were independent and an expert in credit ratings, indices, risk evaluation and research - that was all a lie and you were a fool for believing us. In fact, we were biased and incompetent.
Amazingly, this defense has worked in other cases against S&P.