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DoJ Once Again Targets Moody's Subprime Bond Ratings

But they won't be forced to admit any wrongdoing. Because freedom!
DoJ Once Again Targets Moody's Subprime Bond Ratings

It infuriates me that the banks and bond raters so successfully convinced the public that the crash was the fault of irresponsible homeowners, and not the house of cards they created with their junk bonds. Here's a chance for the DoJ to correct the record, but instead Moody's will be allowed to settle without admitting wrongdoing:

(Bloomberg) -- The Justice Department is seeking to advance a more-than-five-year probe into whether Moody’s Investors Service inflated ratings during the U.S. housing boom, according to three people familiar with matter.

The U.S. government is continuing interviews with former Moody’s executives on whether the credit rater bent criteria on how to assess structured-finance products to win business from Wall Street banks, according to two people familiar with the matter. They asked not to be identified because the investigation is ongoing. It’s unclear whether the probe will result in a lawsuit, and any action against the company wouldn’t be imminent, one of the people said.

The U.S. is wrapping up a case against Moody’s main competitor, Standard & Poor’s, as soon as this week, people familiar with the matter have said. The unit of McGraw Hill Financial Inc. may pay about $1.4 billion to resolve claims it bent its ratings criteria to win business. The world’s largest credit rater will not admit wrongdoing, one of the people said.

Anthony Mirenda, a Moody’s spokesman, didn’t return a request for comment outside of business hours. Patrick Rodenbush, a spokesman for the Justice Department, declined to comment. The Wall Street Journal reported the recent interviews earlier Sunday.


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