The rating agencies are now taking hits from every direction. The Big Three are becoming increasingly focused on trying to defend themselves against law suits, investigations, and pending regulation. The most critical blow recently came from the highly publicized case involving Cheyne Finance. This was an SIV that issued medium term notes which were rated "investment grade" by the agencies. The notes defaulted recently and the holders took the agencies (as well as Morgan Stanley (MS)) to court.

Dow Jones: Two credit-rating agencies must defend a lawsuit over the collapse of a $5.86 billion structured investment vehicle in 2007, a federal judge has ruled, rejecting an argument that their ratings are protected free speech.

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