Now they are continuing on their merry way.

Sure, Lehman Brothers went to the wall and Fannie May and Freddie Mac fell by the way, but so many did not.

You have to wonder whether this seeming immunity from bankruptcy will only encourage them to be even more reckless in the next boom.

Of course, the people who lost most were superannuation holders and small investors who listened to financial advisers and relied on what they were told.

The cycles of booms and busts continue. Do investors ever learn? Will financial advisers ever break the peaks and troughs of exuberant optimism or excessive pessimism?

One of the causes of the financial crisis was the dismantling of a lot of the regulation that had been put in place after the Great Depression. It was an unholy conspiracy between Republicans who wanted the fetters taken off their financial mates and Democrats who wanted the poor and down and out to have access to easy housing mortgage money.

Fortunately, Australia did not deregulate. Indeed, a lot of the regulatory requirements here are quite tough and they offer a deal of protection.

The law moves exceedingly slowly. And it is now catching up.

This week the Federal Court held Standard and Poor's rating agency liable for giving a triple A credit rating to a financial product that clearly was not worth triple-A. The Australian local government councils that invested in it lost 90 per cent of their capital.

The court held S&P gave false and misleading information and did not do the job of a competent ratings agency. It awarded the councils about $30 million in damages.

Picture yourself as a council's treasurer with cash to invest. The world's then most respected credit agency gives a financial product a triple-A rating but the product goes belly up.

It seemed as if, again, the small fry, the ratepayers, would suffer. They would have to pay higher rates for council services. And the big financial cowboys would go free.

At least until now.

The boom and bust cycles will never be fully broken, but each cycle brings its lessons and mechanisms to ameliorate the excesses. We have never had another Great Depression, for example, even though we have had some severe recessions.

Recent developments have given groups of people who suffer at the hands of big players at least a chance to get their day in court. Hitherto, costs have made it prohibitive. But the advent of the litigation funder has made it possible to take on the big boys.

The councils' case was underwritten by litigation funder IMF, which gets 30 per cent of the winnings for taking on the risk.

And it was quite a big risk because it was not a ''day'' in court, but rather 37 days - with about 15 counsel, seven of them senior counsel. The costs in a case like that run into millions.

And it is not over. S&P says it will appeal. (I wonder what it rates its chances at.)

It may be slow and costly, but we should not underestimate the importance of the law in correcting future behaviour.

This case - apparently a world first - will put the frighteners through the ratings industry. And so it should. Ratings agencies make a lot of profit from their assessments. They hold themselves out as experts. And people rely on them.

If those people cannot be successfully sued when the ratings are unwarranted, the agencies are making money on false pretences.

Although the amounts involved in this case are small beer to a company like S&P, there will be wider fallout.

The case is being watched by others who invested in similar financial products, which were given similar ratings.

A case like this also encourages others to come out to be counted , making the liability greater.

Further, defendants often start to realise that the game is up and that they cannot try to shut out plaintiffs by fighting every case - especially if plaintiffs have access to litigation funders.

The potential liability might be beyond the capacity of the ratings agencies to pay compensation. I wonder whether the agencies are changing how they rate themselves.

At the time of the global financial crisis a lot of people asked: what about the ratings agencies?

It has been some time coming, but now we are getting the answer.

■ ■ ■ ■ ■

I do like the Melbourne Cup. It is an annual reminder to me of the stupidity of gambling. I put $50 on an ACTTAB cup special each year and for the last decade or so, I am sure my winnings have been less than statutory return to punters of 85 per cent or so.

The more you gamble, the more you lose. It is rigged that way.

But I will give ACTTAB its due with one thing. This year, I set up an online account with it, my plan being to avoid the Melbourne Cup crush.

It was dead easy. But the website was not set up to take bets on the Cup special, which is designed for mugs like me who know little about horses. The special provides the punter with every possible combination of three or more horses.

So with some trepidation I rang the phone number given on the website.

I thought that on Melbourne Cup day the wait was sure to be a long one. Not a bit of it. Instant answer. Directed to the right place. Bet put on by phone with ease.

No transfer to India or the Philippines. No piped music.

Telstra, take note.

But I suppose a gambling client is always going to be better looked after than a telco customer at the mercy of a quasi-monopoly.

www.crispinhull.com.au