Executive Who Questioned Ratings Sues Moody’s

Moodys also oversees rating on sovereign debt. Anyone expecting a proactive downgrade of key sovereign debt is smoking too much whacky tobacky.

Mr. Kolchinsky’s battle with Moody’s began years ago. In 2007, he questioned how Moody’s rated mortgage securities called collateralized debt obligations, or C.D.O.’s. At the time, he oversaw ratings on bundles of subprime mortgage bonds, the sort that included mortgages to borrowers with the riskiest credit. Shortly after, he was transferred to another unit, and he filed an internal complaint.

Source: nytimes.com