SEC Investigates Moody’s

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.

3 thoughts on “SEC Investigates Moody’s

  1. I bet Wall St. had decided that, after all this time, the ratings companies were going to get off scot free. Their role in the mortgage related meltdown has been known so long the stock traders must have figured they were going to get a pass.

    With some investigations comes information — may not be so certain when there’s the level of regulatory capture that Wall St has over its regulatory agencies. I’d feel better if NY state AG were doing the investigating. I’d feel way better if Sptizer were still in the game….

    (What is it with Dem pols paying high cost for sexual advenstures, but Diaper Dave Vitter is still securely in his Senate seat?)

  2. No, they’re getting investigated because they threatened to downgrade US Government securities. They f &*^*d with Uncle Sam. Simple as that.

  3. Ha! Well, that just might get the government’s attention, eh?

    However, couldn’t happen to a nicer set of tools. What about S&P?

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