Moody’s Corp. has agreed to pay nearly $864 million to settle federal and state claims it gave inflated ratings to risky mortgage investments in the years leading up to the financial crisis. It calls for $437.5 million to go to the Justice Department and $426.3 million to be divided among the states and the District of Columbia. In the settlement, Moody’s, the world’s second-largest credit ratings agency, acknowledged that it did not follow its own standards in rating the risk of securities backed by home mortgages and the collateralized debt obligations that relied on their health. Moody’s acknowledged that it used a more lenient standard for certain financial products and did not make public the differences from its published standards. “The agreement acknowledges the considerable measures Moody’s has put in place to strengthen and promote the integrity, independence and quality of its credit ratings,” Moody’s said in a statement.

Source: New York Times January 14, 2017 02:27 UTC