
Ratings agency Moody's has agreed to a settlement payout with US authorities over mortgage securities fraud that contributed to the 2008 financial crisis. The agreement follows an investigation lasting several years.
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01/14/2017
Ratings agency Moody's has agreed to a settlement payout with US authorities over mortgage securities fraud that contributed to the 2008 financial crisis. The agreement follows an investigation lasting several years.
Moody's ratings was "directly influenced by the demands of the powerful investment banking clients who issued the securities and paid Moody's to rate them," Connecticut Attorney General George Jepsen said in a statement on Friday.
Twenty-one US states and the Justice Department accused Moody's Investors Services, Moody's Analytics and parent company Moody's Corporation of overvaluing the ratings of securities backed by subprime mortgages and at-risk loans.
Some
$437.5 million will go to the Justice Department and
$426.3 million to be divided among the states and the District of Columbia.