CDO2s backed by worthless subprime loans were put into AAA rated bonds. I'd call that an outright scam. For that matter all versions were far more risk than they claimed they were, given that they were worthless, even if there was some fine print somewhere.
I don't have an ISDA with a bank or a copy of a CDO-squared prospectus, but it's hard to imagine that there wasn't a big warning about them being a leveraged product that you should not invest in long-term.
The rating agencies did not understand the products they were rating. However, the warnings were almost certainly on the label.
That's why the rating agencies were sued over this, and not the banks.
A rating inherently claims understanding though. Is a bridge safe to walk on? Some guy who doesn't understand engineering is putting signs on it rating its safety. Ignorance is not a defense at this point.
They did sue the banks. For many things including inflated appraisals of the loans.
I'm sure they have some kind of warning for everything that isn't FDIC insured. But misrepresenting high risk as low risk instead of zero risk is just a quantitative difference. There are plenty of scams that do this. for example just lying about a company's earnings. I suppose the precise crimes they charge them for may differ a bit.