U.S. Preparing Civil Complaint Against Moody's On Mortgage-Bond Ratings

(RTTNews) - Moody's Corp. (MCO) said Friday that it received a letter dated September 29, 2016 in which US Department of Justice stated that it is preparing a civil complaint to be filed against Moody's and MIS in the US District Court for the District of New Jersey alleging certain violations of the Financial Institutions Reform, Recovery, and Enforcement Act in connection with the ratings MIS assigned to residential mortgage-backed securities and collateralized debt obligations in the period leading up to the 2008 financial crisis.

The DOJ also stated in the letter that its investigation remains ongoing and may expand to include additional theories. A number of states attorneys general have indicated that they also expect to pursue similar claims under state law, which claims may include additional periods, theories, asset classes or activities.

The company noted that it is continuing to respond to the DOJ's and states' subpoenas and inquiries.

Moody's noted that it has periodically received subpoenas and inquiries from various governmental authorities, including the US Department of Justice and states attorneys general, following the global credit crisis of 2008.