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SputnikNews reports
Moody's Corporation will pay $864 million to settle federal and state claims that it gave misleading ratings to risky mortgage investments, leading to the subprime mortgage crisis in the US and to the Great Recession.
In the deal, announced January 13, the ratings agency will give $437.5 million to the Justice Department and $426.3 million to be divided among the 21 involved states and the District of Columbia.
The settlement does not come close to the hardship caused by the global crisis theirs and other ratings set into motion, of course. The US Financial Crisis Inquiry Commission found in 2011 that the 2008 mortgage crisis wiped out $11 trillion of American household wealth, Bloomberg notes.
"We conclude the failures of credit rating agencies were essential cogs in the wheel of financial destruction," the conclusions in its final report read. [PDF]
[...] This crisis could not have happened without [Moody's, Fitch, and Standard and Poor's]. Their ratings helped the market soar and their downgrades through 2007 and 2008 wreaked havoc across markets and firms.
Standard and Poor agreed to pay nearly $1.4 billion two years ago to settle similar allegations by the Justice Department, 19 states and the District of Columbia, Yahoo News reports. Moody's settled before a federal lawsuit was filed; Standard and Poor settled only after the US filed a $5 billion suit against them for fraud, Reuters points out.
(Score: 0) by Anonymous Coward on Tuesday January 17 2017, @03:55PM
If you're really going after deterrents, instead of
Try 10-20% fine on the previous years income
Try this: "10-20% fine of the revenue generated in the years during which the infraction was executed or an equal time-duration up to the current moment, whichever is greatest."
After all, if we're going to keep having the death penalty because "it's a deterrent", then shouldn't we stick with the argument that deterrents work for companies as well? hit them where it fucking hurts!
(Score: 0) by Anonymous Coward on Tuesday January 17 2017, @05:50PM
But but... the "ecomony"!
(Score: 0) by Anonymous Coward on Tuesday January 17 2017, @06:38PM
Exactly, the Economy is too important to be left to the ilks of companies!
(Score: 2) by SuperCharlie on Wednesday January 18 2017, @12:57AM
I actually had that thought after posting and yes, the percentage for each year that the crime was committed.