Moody's Corp. directors and officers were sued by shareholders and accused of deliberately overrating asset-backed securities at the world's second-largest credit-rating company.
The Louisiana Municipal Police Employees Retirement System filed the so-called derivative suit yesterday in New York on behalf of the company, naming Moody's as a nominal defendant
The pension system claimed that, as a result of misconduct, "trillions of dollars of highly risky securities were sold to investors that should never have seen the light of day."
U.S. House investigators last week released e-mails saying Moody's employees told executives that issuing dubious ratings to mortgage-backed securities made it appear they were incompetent or "sold our soul to the devil for revenue."
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