Moody’s could face SEC probe
NEW YORK — Moody’s may face an SEC investigation over its license application three years ago to be one listed as one of the recognized U.S. credit ratings agencies.
The company did its own review of how it rated the risk in 2008 and found that it had erred in the way it rated some debt obligations. The ratings are unrelated to the mortgage backed securities for which the agency is already under fire.
Late Friday, Moody’s revealed in a filing with the Securities and Exchange Commission that federal investigators called its procedures for quantifying some debt ratings “false and misleading…in light of the company’s finding that a rating committee policy had been violated.” The SEC plans an administrative review.
The company’s own investigation found errors in the way it rated complex European debt products in 2007 called constant-proportion debt obligations.
Moody’s says it disagrees with the SEC’s findings and has filed a response to the inquiry.
Critics say that Moody’s and other ratings agencies failed to adequately review mortgages that were packaged and sold on Wall Street before the economic crises spread globally.
A panel investigating the roots of the financial crisis used its subpoena power for the first time last month to obtain documents from Moody’s Corp.
The chairman of the Financial Crisis Inquiry Commission said Moody’s refused to provide the documents voluntarily.
Today, company shares plunged 10 percent, or $2.26, to $21.10 in morning trading.
To sign up for Mississippi Business Daily Updates, click here.
One Response to “Moody’s could face SEC probe”
FOLLOW THE MBJ ON TWITTERMy Tweets
Top Posts & Pages
- GreenTech holds grand opening of neighborhood electric vehicle plant
- NEW IN MADISON COUNTY — Mississippi Bio-Medical Business Collaboratory to be introduced Friday
- Turner Grain’s transition will help consolidate lawsuits alleging breach of contract
- MDOT cutting more than 40 jobs in Right-of-Way Division
- Mississippi Film Studios signs contract with New Orleans company
- Granddaughter of Barq's Root Beer founder dies at 90
- Mars Food expanding Delta plant; investing $31M and adding jobs
- Board authorizes sale of company that owns Silver Slipper Casino
- David Duval, former British Open winner, joins Sanderson Farms field
- JRA plans image makeover, hires crisis manager