There is plenty of blame to go around in the credit crisis, and many investors and public officials have been placing it on the credit rating agencies that gave AAA ratings to some of the mortgage-backed financial instruments that allegedly contributed to billions in investor losses.
Attorneys general in Connecticut and Ohio have sued the big three rating agencies–Standard & Poor’s, Moody’s and Fitch–and, in May, New York Attorney General Andrew Cuomo’s office was revealed to be investigating the relationship between the ratings agencies and certain banks that peddled mortgage-backed securities. (Cuomo settled an investigation into the rating agencies’ conduct leading up to the sub-prime mortgage meltdown in 2008.) Moody’s just disclosed that it received a Wells notice indicating a forthcoming SEC action. And more stringent regulation of the rating agencies is part of the financial reform package the Senate just passed.
