Moody’s says US Justice Department preparing complaint alleging violations

The complaint alleges Moody's violated the Financial Institutions Reform, Recovery and Enforcement Act while rating residential mortgage-backed securities and collateralized debt obligations.

By: Reuters | Published:October 21, 2016 6:42 pm
moodys, moodys ranking, moodys investors service, banking, government, government of india, indian government, gst, pay, pay commission, tax, india news, business news, indian express news DOJ alleges Moody’s of violation of Financial Institution Reform (File Photo) 

Moody’s Corp, parent of ratings agency Moody’s Investor Services, said on Friday the US Justice Department was preparing a civil complaint against the company, alleging violations of federal law in the run-up to the financial crisis.

The complaint alleges Moody’s violated the Financial Institutions Reform, Recovery and Enforcement Act while rating residential mortgage-backed securities and collateralized debt obligations.

Moody’s has periodically received subpoenas and inquiries from government authorities, including the Department of Justice, related to the global credit crisis of 2008. The company also reported that third-quarter net income attributable to Moody’s rose 10.2 percent to $255.3 million for the three months ended Sept. 30.