Moody’s, S&P Said to Be Probed by N.Y. Over 2008 AccordDavid McLaughlin
Moody’s Investors Service, Standard & Poor’s and Fitch Ratings are being investigated by the New York Attorney General over whether they breached a 2008 settlement with the state, a person familiar with the matter said.
The companies reached an agreement with then Attorney General Andrew Cuomo that required them to adopt changes to their operations. Eric Schneiderman, the current attorney general, is probing whether they complied with the agreement, said the person, who wasn’t authorized to speak publicly about the probe and asked not to be identified.
The U.S. Justice Department and state attorneys general this week sued S&P, accusing the company of inflating ratings on mortgage-backed securities during the housing bubble. New York wasn’t one of the states that sued.
Michael Adler, a Moody’s spokesman, and Dan Noonan, a Fitch spokesman, didn’t immediately respond to e-mails yesterday after regular business hours seeking comment about the New York probe.
Catherine Mathis, a spokeswoman for McGraw-Hill Cos.’ S&P unit, declined to comment on the probe.
New York’s investigation was reported yesterday by the Wall Street Journal.
In the 2008 deal with Cuomo, the companies agreed to change the way they were paid to rate mortgage-backed securities and to disclose more information about their process, including whether an issuer sought, and then decided not to use, ratings from a certain company.