Moody's Corp. has agreed to pay nearly $864 million to settle federal and state claims it gave inflated ratings to risky mortgage investments in the years leading up to the financial crisis.
announced Friday was struck among the New York-based rating agency, the
Justice Department and the attorneys general for 21 states and the
District of Columbia.
It calls for $437.5 million to go to the
Justice Department and $426.3 million to be divided among the states and
the District of Columbia.
Moody's — along with the other two
major rating agencies, Standard & Poor's and Fitch — were widely
criticized for giving low-risk ratings to the risky mortgage securities
being sold ahead of the crisis, while they reaped lucrative fees.