Standard & Poor’s misled investors by awarding its highest rating to a complex derivative product that collapsed in value less than two years after it was created by ABN Amro’s wholesale banking division, an Australian judge has ruled, in a landmark case that paves the way for legal action in Europe. 

In a damning verdict the Federal Court of Australia ruled S&P and ABN Amro had “deceived” and “misled” 12 local councils that bought triple-A rated constant proportion debt obligations (CPDOs) from an intermediary in 2006.