Moody's In the SEC's Crosshairs

With any luck, something might actually come from this:

The Moody’s Corporation said in a regulatory filing that its credit rating unit could face enforcement action from the Securities and Exchange Commission for reportedly misleading regulators in a 2007 application to remain a nationally recognized rating agency.


According to Moody’s filing, the S.E.C. claimed the Moody’s description of its procedures for determining credit ratings was ”false and misleading” because of Moody’s own finding that a policy had been violated internally.

Shorter version: Moody's method of rating mortgage-backed securities was basically "ask Goldman Sachs what they wanted it to be", rather than the algorithms and models they claimed to use.

No comments:

Post a Comment