Feds Plan to Sue Moody's Over Pre-2008 Securities Ratings – NMP Skip to main content

Feds Plan to Sue Moody's Over Pre-2008 Securities Ratings

Phil Hall
Oct 21, 2016
www.nrmlaonline.org

Moody's Corp. has announced that the U.S. Department of Justice (DOJ) is planning to bring a civil complaint that charges the company with violating the Financial Institutions Reform, Recovery and Enforcement Act for its rating of residential mortgage-backed securities and collateralized debt obligations in the period before the 2008 financial crash.
 
According to a Bloomberg report, Moody’s revealed that it was informed of the DOJ’s plans in a September 29 letter from the department. Moody’s added that an unspecified number of state attorneys general may pursue similar claims, adding that the governmental probes into the case “remains ongoing and may expand to include additional theories.”
 
The DOJ offered no public comment on the report. Last year, another credit ratings agency, S&P, paid $1.5 billion to settle federal charges accusing it of improper ratings prior to the 2008 crash. S&P added that it accepted the settlement rather than deal with the “delay, uncertainty, inconvenience, and expense” of litigation.
Published
Oct 21, 2016