Moody’s Rating-Lawsuit Protection Bid Challenged by U.S. States
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Moody’s Investors Service’s demand that taxpayers indemnify it against lawsuits over ratings will be challenged by state and local governments that say the company is shunning legal responsibility for its work.
Underwriters and interest-rate swap providers in the $2.8 trillion municipal bond market have reworded contracts in recent years to escape liability. Now, issuers say Moody’s is asking them to absorb the cost the company and its executives may bear from lawsuits over ratings, except in cases of fraud or willful misconduct.