Skip to comments.MOODY'S ANALYST BREAKS SILENCE: Says Ratings Agency Rotten To Core ...
Posted on 08/19/2011 3:31:48 PM PDT by dynachrome
highlights of Harrington's story below. Here are some key points:
Moody's ratings often do not reflect its analysts' private conclusions. Instead, rating committees privately conclude that certain securities deserve certain ratings--but then vote with management to give the securities the higher ratings that issuer clients want.
Moody's management and "compliance" officers do everything possible to make issuer clients happy--and they view analysts who do not do the same as "troublesome." Management employs a variety of tactics to transform these troublesome analysts into "pliant corporate citizens" who have Moody's best interests at heart.
Moody's product managers participate in--and vote on--ratings decisions. These product managers are the same people who are directly responsible for keeping clients happy and growing Moody's business.
At least one senior executive lied under oath at the hearings into rating agency conduct. Another executive, who Harrington says exemplified management's emphasis on giving issuers what they wanted, skipped the hearings altogether.
(Excerpt) Read more at businessinsider.com ...
MOODY'S ANALYST BREAKS SILENCE: Says Ratings Agency Rotten To Core With Conflicts, Corruption, And Greed
The analyst, William J. Harrington, worked for Moody’s for 11 years, from 1999 until his resignation last year.
From 2006 to 2010, Harrington was a Senior Vice President in the derivative products group, which was responsible for producing many of the disastrous ratings Moody’s issued during the housing bubble.
Harrington has made his story public in the form of a 78-page “comment” to the SEC’s proposed rules about rating agency reform, which he submitted to the agency on August 8th. The comment is a scathing indictment of Moody’s processes, conflicts of interests, and management, and it will likely make Harrington a star witness at any future litigation or hearings on this topic.
The primary conflict of interest at Moody’s is well known: The company is paid by the same “issuers” (banks and companies) whose securities it is supposed to objectively rate
Link to his letter:
The "rating agencies" have unimaginable power and as long as the purchasers believe in them they will continue to do so NO MATTER WHAT THEY DO.
The government agencies charged with some degree of authority to detect and deal with corruption of this sort have functionally granted all these guys a waiver. That's the sort of "absolute power" ~ the granting of waivers ~ that precipitates total corruption.
The Obots have no idea that there's anything wrong ~ nor can they.
The ratings agencies shoul be judged on their past performance in determining ratings. Maybe someone should start a ratings agency for ratings agencies.
That’s a “derivative” ~ Bwahahahahahahahaha!
John Moody would neither recognize nor condone what’s become of the company he founded. Nor would he be the least bit surprised.
Interlocking directorships of multi-national corporations?
And rotten to the core.
Buffett: S&P Downgrade ‘Doesn’t Make Sense’
(Democrat Buffett owns Moody’s rating service...)
Buffett grilled [Defends Moody’s at hearing]
Obama to award Warren Buffet Medal of Freedom