27 Mart 2017 Pazartesi Breaking News             Latest US News            New York

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Maryland Attorney General Brian E. Frosh's office announced Friday that Maryland will receive $12 million of an $863 million settlement with Moody's over allegations the ratings company misled consumers and investors about its independence.The state was...

Maryland joins settlement with Moody's over alleged improper ratings

Maryland Attorney General Brian E. Frosh's office announced Friday that Maryland will receive $12 million of an $863 million settlement with Moody's over allegations the ratings company misled consumers and investors about its independence.The state was...

Maryland joins settlement with Moody's over alleged improper ratings

Maryland Attorney General Brian E. Frosh's office announced Friday that Maryland will receive $12 million of an $863 million settlement with Moody's over allegations the ratings company misled consumers and investors about its independence.

The state was among 21 states, Washington, D.C., and the U.S. Department of Justice to settle with Moody's Corp. and Moody's Investors Services Inc. over ratings for certain securities, including residential mortgage-backed securities and collateral debt obligations, which get their value from monthly mortgage payments made by consumers.

Frosh said in a statement that he hoped the settlement would prevent "a repeat of this misconduct that contributed to our nation's financial crisis."

Moody's gave into powerful, repeat investment bank customers and allowed its analysts to inflate ratings of "toxic assets" packaged and sold by the Wall Street banks, according to Frosh's office. The business earned the analysts lucrative fees.

The banks needed triple-A ratings to sell the securities to institutional investors such as pension plans. The rating made the securities seems less risky.

The settlement calls for Moody's to provide a statement about the way it rated the securities leading up to the financial crisis. It also requires Moody's CEO to provide annual certification that the company is following certain compliance requirements.

--Meredith Cohn

Our editors found this article on this site using Google and regenerated it for our readers.

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