Pursuits
Moody’s Settles Calpers Ratings Lawsuit for $130 Million
- Accord follows S&P’s $125 million in similar California case
- Companies were accused of inflating subprime-bond ratings
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Moody’s Investors Service Inc. agreed to pay $130 million to settle claims by the California Public Employee Retirement System over allegedly inflated ratings on residential-mortgage bond deals.
The largest U.S. state pension fund’s accord with Moody’s means the company averts a trial over the securities that was to begin in May. The settlement follows the related February 2015 announcement that McGraw Hill Financial Inc.’s Standard & Poor’s paid $125 million to settle claims by Calpers over grades on subprime mortgages during the run-up to the 2008 financial crisis. With Tuesday’s announcement, ratings companies have paid Calpers $255 million to resolve such claims, the retirement system said.