Moody’s Says Don’t Inhale the Smoke It’s Puffing: Jonathan Weil

March 12 (Bloomberg) — Just as the cover-up often is worse than the crime, sometimes the defense is even worse than the allegation.

So it is with Moody’s Corp. Over the years, the credit- rating company’s constant refrain has been it’s an independent body that publishes its opinions accurately and impartially. Never mind that it gets paid by the same companies it rates. Moody’s says it can manage that conflict of interest.

“The market’s trust in and reliance upon Moody’s” are part of the “raw materials that support our business,” the company said in its 2005 annual report. “Independence. Performance. Transparency,” it went on. “These are the watchwords by which stakeholders judge Moody’s.” Moody’s also cites its code of professional conduct, through which it seeks “to protect the quality, integrity and independence of the rating process.”

Now compare that with what Moody’s told a federal judge in New York last September in response to accusations made in a shareholder lawsuit, which said Moody’s claims of independence were false.

“Generalizations regarding integrity, independence and risk management amount to no more than puffery,” Moody’s said in court papers. As such, alleged “misstatements of this nature are insufficient to sustain a claim under the securities laws.”

/snip/

Did you catch that? The mind bending arrogance of these assholes defies imagination.


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