By Tyler Durden
And now for today’s bombshell – literally at the very end of Moody’s 10-Q filed last night, we find this stunner:
On March 18, 2010, MIS received a “Wells Notice” from the Staff of the SEC stating that the Staff is considering recommending that the Commission institute administrative and cease-and-desist proceedings against MIS in connection with MIS’s initial June 2007 application on SEC Form NRSRO to register as a nationally recognized statistical rating organization under the Credit Rating Agency Reform Act of 2006.
Well at least it took Moody’s under two months to report this massively material development, which while we are not positive on how to read the C&D action on the NRSRO registration, could mark the beginning of the end for the rating agency. If the firm is enjoined from providing additional rating research should the SEC action find fault and proceed with a lawsuit, it would an game over for the business. Egan-Jones: it’s IPO time.
Continue reading Moody’s Receives Wells Notice, SEC To Commence “Cease & Desist” Proceedings Against Rating Agency
Related reading:
After S.E.C. Suit Warning, Traders Flee Moody’s Shares
The New York Times (10 May 10)
