A federal judge in New York has thrown out a lawsuit against Standard & Poor’s (S&P) and Moody’s Corp. brought by investors who claim the ratings agencies

defrauded them on nearly $100 billion in mortgage-backed securities (MBS) issued by the now defunct Lehman Brothers Holdings, Inc. back in 2007.

The investors accused the agencies of misleading them by disregarding ratings guidelines, serving conflicting roles in evaluating and structuring the bonds, and sacrificing their independence, according to court documents.

A CNN report described the mortgage-backed securities as certificates sold as AAA investment products to pension funds and insurance companies who were only permitted to purchase high-rated investment-grade bonds.

In granting the ratings agencies motion to dismiss, U.S. District Judge Lewis Kaplan said the securities law at issue in the case has never applied to ratings companies.

Joshua Rubins of Satterlee Stephens Burke & Burke LLP, the law firm representing Moody’s, told Reuters, “The judge has obviously agreed with the arguments that we made that the ratings agencies have never been held to be potential defendants under these provisions and it was a distortion of the statute to try to bring claims against the ratings agencies.”

Joel Laitman, lead counsel for the investors, said he and his clients will wait to see Kaplan’s written ruling, which has not yet been released, before deciding on a future course of action.

Ratings agencies face similar lawsuits in other states, and market observers say Kaplan’s ruling could carry far-reaching implications for pending cases.