SEC issues historic fine to Moody’s for misleading ratings

Moody's 230x150
By Alexander Saeedy
28 Aug 2018

The US Securities and Exchange Commission on Tuesday announced a fine against Moody’s for internal control and modelling issues pertaining to ratings of RMBS, as well as a first ever charge for deficient ratings symbols of CLO combo notes. The rating agency agreed to pay a total of $16.25m to settle the charges.

According to the SEC, Moody’s failed to verify the accuracy of outsourced RMBS models, and also possibly assigned 26 improper ratings to CLO combo notes. The rating agency failed to ensure that the RMBS models it used to forecast credit losses were accurate. Those models were not created by Moody’s ...

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