California Attorney General Jerry Brown of has opened an investigation into the credit rating agencies over their rating of municipal bonds issued by California and its related issuers, Ambac Financial Group Inc. last night said in a quarterly report filed with the Securities and Exchange Commission.

A letter sent by the attorney general’s office dated Oct. 27, 2008 requests Ambac “preserve a range of potentially relevant evidence in anticipation of a subpoena to Ambac.”

The attorney general’s office could not confirm or deny the existence of an investigation. California Treasurer Bill Lockyer has been one of the most vocal critics of the credit rating agencies, saying they promoted a dual-rating system that cost municipal issuers by rating them systemically lower than corporate credits with similar or higher rates of default.

Connecticut Attorney General Richard Blumenthal in July filed lawsuits against Moody’s Corp., Fitch Inc., and McGraw-Hill Cos., parent of Standard & Poor’s, saying the dual rating system cost taxpayers millions of dollars through higher interest costs and bond insurance premiums.

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