AND why would Holder intervene? His former law firm Covington ALSO was counsel to Moody’s…read this memo:
MEMORANDUM
| TO: | File No. S7-12-03 |
| FROM: | Mandy Sturmfelz |
| DATE: | October 20, 2003 |
| RE: | Concept Release No. 33-8236: Rating Agencies and the Use of Credit Ratings under the Federal Securities Laws |
On September 11, 2003, Robert L.D. Colby, Michael A. Macchiaroli, Thomas K. McGowan, Mark M. Attar, and Mandy Sturmfelz of the SEC’s Division of Market Regulation met with John Rutherfurd, Jr., President and CEO of Moody’s Corporation, and Raymond W. McDaniel, President of Moody’s Investors Service Inc. (“Moody’s”), to discuss Moody’s comment letter on the above-referenced concept release. David B.H. Martin and Lanny A. Breuer of Covington & Burling, counsel to Moody’s, also attended the meeting.
Lexology-
Former Moody’s analyst, Ilya Kolchinsky, has accused the credit rating powerhouse of overstating its ratings for countless toxic mortgage-backed securities that caused the financial meltdown in 2008, misleading investors and costing the U.S. billions in funds spent bailing out Wall Street’s too-big-to-fail banks. Kolchinsky’s 107-page False Claims Act complaint, filed in 2012, was recently unsealed after the government failed to intervene.
The complaint alleges that from 2004 to 2007, Moody’s issued inflated ratings, often “triple-A,” for the majority of risky residential mortgage-backed securities and collateralized debt obligations it reviewed, as a result of “concealed conflicts of interest and Moody’s reckless profit-maximization policies.” According to Kolchinsky, it wasn’t until October 2007 when the market started its downward turn that Moody’s began downgrading its ratings.
[LEXOLOGY]
image credit: Jason Reed/REUTERS
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