JACKSON, Miss. (WJTV) — Attorney General Jim Hood said Moody’s will pay Mississippi more than $26 million to settle allegations that the company engaged in deceptive conduct during the height of the financial crisis.
Moody’s Corporation, Moody’s Investors Service, Inc., and Moody’s Analytics, which is a credit rating agency, greed to pay a total of $863,791,823 to 21 states, the District of Columbia and the federal government.
Hood’s lawsuit claimed that Moody’s ratings of structured finance securities were tainted by the company’s drive to win business and its concerns for market share.
“Moody’s reckless conduct went unchecked for years, feeding a subprime mortgage bubble,” Attorney General Hood said. “While Moody’s profited handsomely, the economy crumbled as people lost their homes. Pension funds, retirement funds, and other investment vehicles in Mississippi and across the country lost billions of dollars as the value of securities with inflated ratings plummeted. This settlement is another important step toward holding accountable those responsible for our mortgage crisis.”
Moody’s has agreed to take specific compliance measures intended to prevent the same problems from ever reoccurring.
In 2011, Hood sued both Moody’s and Standard & Poor’s for violations of the Mississippi Consumer Protection Act.
In addition to Mississippi, the states involved in the settlement are Arizona, California, Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Massachusetts, Maryland, Missouri, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, South Carolina and Washington as well as the District of Columbia.