Are you telling me the stock market just figured this out – or did the stock drop because they got caught?
NEW YORK — Moody’s Investors Service stock fell sharply Monday following news that the ratings company is being investigated for possibly misleading regulators three years ago.
Moody’s disclosed late Friday that it might face a Securities and Exchange Commission administrative charge that it misled regulators when it applied for its license in 2007. Ratings agencies must be licensed by the federal government.
The investigation comes as ratings agencies like Moody’s and Standard & Poor’s continue to face scrutiny and criticism related to their role in the credit crisis.
Moody’s stock dropped $1.59, or 6.8 percent, to $21.77 Monday, although the broader market rose sharply.