Moody's Ratings controversies
Controversies tied to this brand in public sources. A listing is not a finding of fault.
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2024
Alleged failures to preserve credit-rating communications
The SEC's administrative order alleged widespread and longstanding failures to maintain or preserve messages relating to credit-rating activities, including off-channel communications involving employees at different seniority levels. The proceeding concerned regulatory recordkeeping obligations.
2011
Sovereign-downgrade criticism
Moody's faced public criticism from countries and market participants after sovereign downgrades, including Portugal during the European sovereign-debt crisis. Critics argued that downgrades could increase borrowing costs, while the agency characterized ratings as analytical opinions about credit risk.
2007
Subprime and structured-finance rating controversy
Moody's faced extensive criticism after high-rated mortgage-backed securities and related structured products suffered severe losses during the U.S. housing and credit crisis. The controversy focused on model assumptions, rating processes, issuer-paid incentives and the agencies' role in the expansion of structured finance.
2001
Enron-related scrutiny
Moody's, along with other rating agencies, attracted criticism and scrutiny concerning the timing and effectiveness of credit assessments surrounding Enron's collapse.
1995
Jefferson County unsolicited-rating lawsuit
Jefferson County, Colorado sued over an unsolicited negative outlook assigned to a bond issue, arguing that the rating increased borrowing costs. Moody's successfully argued that its assessment was a protected opinion, and the judgment was upheld on appeal.