Justice Department, states weigh action against Moody's

[Eugene]

Source: Reuters

Justice Department, states weigh action against Moody's

By Aruna Viswanatha and Luciana Lopez
Thu Feb 7, 2013 7:35pm EST

(Reuters) - The Justice Department and multiple states are discussing also suing Moody's Corp (MCO.N) for defrauding investors, according to people familiar with the matter, but any such move will likely wait until a similar lawsuit against rival Standard and Poor's is tested in the courts.

Inquiries into Moody's are in the early stages, largely because state and federal authorities have dedicated more resources to the S&P lawsuit, said the sources, who were not authorized to speak publicly about enforcement discussions.

Moody's spokesman Michael Adler and Justice Department spokeswoman Adora Andy declined to comment for this story.

Moody's in the past has defended itself against similar allegations, including a 2011 congressional report that concluded the major ratings agencies manipulated ratings to drive business.

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Read more: http://www.reuters.com/article/2013/02/08/us-moodys-investigation-idUSBRE91618520130208

[elleng]

1. Would be a good thing, imo,

but the S&P matter will likely take a while for it to be 'tested in the courts.'

[Warpy]

2. Moody's and S&P allowed all the bank fraud to take place.

Had they done their jobs and looked at the mortgages backing those securities they were given high ratings to, the whole scam would have been strangled in its cradle.