John Walker, Executive Director of Bentham IMF, one of the world’s largest litigation funders and the company underwriting the Dutch claim, said: “Rating agencies, by conferring AAA ratings on products they knew were incapable of accurate assessment, were a material cause of the mispricing of risk and misallocation of capital in global debt markets that became dysfunctional in 2007, heralding the GFC. Ratings were used then by investment banks to depict sows’ ears as silk purses. This action seeks to hold banks and rating agencies to account for their conduct prior to the GFC.”

London-based distressed asset specialist Fideres Partners LLP has been retained by Bentham IMF Ltd to identify and coordinate the affected institutional investors and to assist in gathering the complex information needed to support Dutch law firm BarentsKrans NV.

Steffen Hennig, lead partner on the case at Fideres said: “This is a landmark case in many respects. It’s the first time that a group action on structured products is brought in a European court by institutional investors. It is also the first time that a European court has been asked to take a stand on the responsibility of a Rating Agency for losses incurred on toxic financial products which received the highest credit ratings.”