Standard & Poor's went on trial in the Federal Court yesterday, in the first case against a ratings agency. It is accused of misleading 12 municipalities by giving top ratings to financial products that collapsed during the financial crisis.According to a report in the Sydney Morning Herald, documents submitted to the court show that S&P did not do its own research on the Constant Proportion Debt Obligation Notes. Rather, it "cut and pasted" analysis by ABN Amro - the investment bank selling the notes.S&P gave a AAA rating to ABN Amro's Rembrandt CPDOs, a variant of a collateralised debt obligation, in late 2006. The councils invested in the notes in 2007 and within two years had lost 90 per cent of the value of their investment.The councils claim S&P was negligent and in breach of its duty of care; it knew the notes were highly risky and should never have rated them AAA.The councils also claim that ABN Amro took advantage of S&P's "lack of understanding of the product".