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”
Top Posts & Pages
- Lawmakers debating alternative to Medicaid expansion
- UPDATED: House subcommittee tosses discrimination elements from religious freedom bill
- Chris McDaniel gets a thank you note from Travis Childers
- Senate passes teacher pay raise legislation
- Pickering collects more money from failed beef plant project
- States settle with manufacturers in DRAM price-fixing case
- Reactive Surfaces files lawsuit against Toyota in patent dispute
- Nehi Bottling Company has been a Cleveland fixture for 85 years
- White House hotel making comeback in Biloxi