Moody's Faces Scrutiny of Error, Possible `Cover-Up' |
| Bloomberg - May 22, 2008 |
Moody's Corp., owner of the second- largest credit-rating company, faces increased government scrutiny after starting an internal probe into whether a computer error gave top rankings to securities that didn't deserve them.
Connecticut Attorney General Richard Blumenthal said yesterday he is investigating New York-based Moody's for ``potential fraud'' in connection with a possible ``cover-up'' of inaccurate ratings. U.S. Senator Charles Schumer urged regulators to examine the matter and fine the company if it delayed disclosing the mistake to investors.
Moody's plunged the most in nine years yesterday after the ratings company said it is conducting ``a thorough review'' of whether a computer glitch caused it to assign Aaa rankings to about $4 billion of European securities that later fell in value. Blumenthal said his office was aware of possible errors before they were reported this week by the Financial Times.
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- Posted: 2008-05-22 08:39:39
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