The U.S. Department of Justice is starting to focus its attention to another credit-rating firm for issuing questionable grades on mortgage deals in the buildup to the financial crisis. Per The Wall Street Journal:
Justice Department officials have been quietly meeting with multiple former executives of Moody’s Investors Service to discuss rating of securities before the crisis. So far, it isn’t clear whether it will result in a lawsuit.
In the recent wave of meetings, Justice Department officials, citing internal company emails, have pressed former Moody’s executives on whether the firm compromised standards to win business, according to people familiar with the matter. The main focus, as with the S&P case, has been on residential-mortgage deals from around 2004 to 2007.
Credit-rating agencies have been under fire lately. Standard & Poor’s Ratings Services recently announced a $125 million settlement with the California Public Employees’ Retirement System, or Calpers, to resolve a case involving inflated grades of residential-mortgage deals that later faltered.