The Conclusion of the Department of Justice's Investigation into Moody’s: Financial Penalties But No Deterrent

7 Pages Posted: 17 Feb 2017

Date Written: February 10, 2017

Abstract

The U.S. Department of Justice recently concluded its investigation into the role that the credit rating agency, Moody’s, had played in contributing to the Financial Crisis of 2007/08. The size of the financial-based penalty was to be expected because, as mentioned in a previous article, the extent of evidence that could have been gathered against Moody’s, as opposed to the evidence gathered against Standard & Poor’s in a similar investigation in 2015, was going to be smaller due to the record-keeping policies of Moody’s. Yet, what is of interest is the remarkable statement of facts that Moody’s have acknowledged, and the compliance provisions that the Department of Justice are promoting as being a victory for investors and the public at large. In this article we will see that the result of these investigations is that the top two agencies have emerged relatively unscathed, and that they are primed to take advantage of their position again when regulatory amnesia takes hold.

Keywords: Credit Rating Agencies, US Department of Justice, Moody's

Suggested Citation

Cash, Daniel, The Conclusion of the Department of Justice's Investigation into Moody’s: Financial Penalties But No Deterrent (February 10, 2017). Business Law Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2919615

Daniel Cash (Contact Author)

Aston University ( email )

Aston Triangle
Birmingham, B4 7ET
United Kingdom

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