Investors question Moody’s, Fitch involvement in troubled mortgage bonds

The Justice Department decision to sue Standard & Poor’s has investors asking why Moody’s Investors Service and Fitch Ratings weren’t targeted for awarding the same top grades to troubled mortgage bonds and other debt securities.

“What purpose does it serve for the U.S. government to bring an action against S&P at this point in time? On the surface, is this a bid for some sort of retribution” for the company’s 2011 downgrade of the U.S., Bonnie Baha, head of global developed credit at Los Angeles based DoubleLine Capital LP, which oversees about $53 billion, said in a telephone interview yesterday. “Moody’s and Fitch assigned the same ratings to these transactions. Why aren’t they named as well?”

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