Defendant Name: Moody's Investors Service, Inc.

Defendant Type: Subsidiary of Public Company
Public Company Parent: Moody's Corporation

Document Reference: 2018-169_34-83965

Document Details

Legal Case Name In the Matter of Moody's Investors Service, Inc.
Document Name SEC Charges Moody's With Internal Controls Failures and Ratings Symbols Deficiencies
Document Date 28-Aug-2018
Document Format Administrative Proceeding
File Number 3-18688
Allegation Type Other
Document Summary According to the Commission: "Moody's failed to establish and document an effective internal control structure as to models that Moody's had outsourced from a corporate affiliate and used in rating RMBS from 2010 through 2013. Moreover, Moody's failed to maintain and enforce existing internal controls that should have been applied to the models. Ultimately, Moody's corrected more than 650 RMBS ratings with a notional value exceeding $49 billion, due, in part, to errors in the models. Also, in 54 instances, Moody's failed to document its rationale for issuing final RMBS ratings that deviated materially from model-implied ratings."

Disgorgement & Penalty Information

Compliance Related Independent Consultant
Monetary Penalties:

Civil Penalty

Individual:     $15,000,000.00 Shared:    

Related Documents:

34-83965 28-Aug-2018 Administrative Proceeding
Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order
According to the Commission: "MIS failed to conduct, or take reasonable steps to ensure that MA conducted, adequate quality assurance processes with regard to the models, which, in turn, led to MIS's failure to timely detect and prevent numerous errors in the models that MIS used in the credit rating process for RMBS beginning in 2010."

Related Actions:

In the Matter of Moody's Investors Service, Inc.