Ratings agency Moody’s has agreed to pay more than $16 million to resolve charges tied to its assessment of residential mortgage-backed securities worth tens of billions of dollars, market regulators announced Tuesday.
The case also involved the first charges brought by the Securities and Exchange Commission involving deficient ratings symbols.
It comes nearly 10 years after the global financial crisis, in which the improper rating of such securities played a starring role.
According to the SEC, Moody’s failed to establish and enforce proper internal controls for models used to rate mortgage backed securities between 2010 and 2013.
As a result, the agency, one of the largest in the United States, corrected more than 650 ratings of mortgage-backed securities valued at more than $49 billion, according to the SEC.
In 54 cases, Moody’s rated securities differently than its own models suggested it should but kept no record of its reasons for doing so, the commission…
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