Moody’s Corp. said it reached a settlement with stockholders in lawsuits filed over structured-finance ratings.
Moody’s agreed to implement new governance procedures to settle with the Louisiana Municipal Police Employees Retirement System and other investors, according to a filing by the New York-based company today with the U.S. Securities and Exchange Commission. The ratings company didn’t admit wrongdoing.
The Louisiana pension plan sued Moody’s Chief Executive Officer Raymond McDaniel and other officers in federal court in Manhattan in 2008, saying they ruined the company’s reputation by overstating grades for risky mortgage bonds. Moody’s, along with competitor Standard & Poor’s, were blamed for helping inflate the housing bubble by both the Financial Crisis Inquiry Commission and a Senate report last year.
None of the Moody’s executives agreed to pay investors any money in the settlement, according to the filing. Lawyers for the investors asked the court to approve $4.95 million in fees and expenses.
The case is Louisiana Municipal Police Employees Retirement System v. McDaniel, 08-09323, U.S. District Court, Southern District of New York (Manhattan).