Court of Appeal upholds SFAT's ruling on Moody's Red Flags Report

The appeal failed, but the Court held that the SFAT was wrong to conclude that the Report itself constituted credit ratings, because the opinions were not "primarily" regarding creditworthiness - a definitional point which Moody's had failed to make in the SFAT. Nevertheless, the Court held that the Report fell within Moody's Type 10 credit rating activities because it amplified or supplemented its ratings. The right of appeal to the court is limited to points of law, so it does not discuss whether the report was produced to a high enough standard. As Webb-site has previouly opined, it was, and attacking Moody's has had a chilling effect on further licensed research of this nature. Have you seen any other red flag reports since 2011?

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HKSAR Securities and Futures Appeals Tribunal 香港特別行政區證券及期貨事務上訴審裁處
Moody's Investors Service Hong Kong Limited

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