In a bid to resolve an ongoing investigation into credit ratings on subprime mortgage securities, Moody’s has agreed to pay a penalty of some $864 million - about one-third of the $2.5 billion that Moody’s earned in the four years leading up to the crisis, according to Bloomberg.
The US Justice Department said in a statement that Moody's reached the agreement with it and 21 states, which accused the ratings agency of inflating ratings on mortgage securities at the centre of the 2008 financial crisis. Bloomberg reported that while Moody's failed to abide by its own standards in rating some securities according to the government, the settlement does not contain a finding that the company violated the law or any admission of liability.
Moody's said in a statement:
"The agreement acknowledges the considerable measures Moody's has put in place to strengthen and promote the integrity, independence and quality of its credit ratings. Moody's has agreed to maintain, for the next five years, a number of existing compliance measures and to implement and maintain certain additional measures over the same period."
