U.S. credit-ratings agencies have conflicts of interest because they're paid by firms they're supposed to rate neutrally, an ex-Moody's Corp. executive said.
"This conflict of interest permeates all levels of employment, from entry-level analyst to the chairman and chief executive officer of Moody's Corp.," William Harrington, a former Moody's Investors Service derivative products senior vice president, said in a filing to the U.S. Securities and Exchange Commission, which is considering new rules to reform the agencies.
Agency analysts are pressured through a culture of "intimidation and harassment" to give clients the ratings they want out of fear the clients will otherwise fire the agency and take their business to another one, Harrington said in a 78-page "comment" submitted to the SEC Aug. 8.
Moody's is one of the three central credit-rating companies in the United States, along with Standard & Poor's Financial Services and Fitch Ratings. Their job is to provide an objective analysis of the risk posed to investors by bonds, companies and countries.
Donald Trump’s media company – which owns the Truth Social platform favored by the US president...
The long legal battle to erase the debts of nearly half a million federal student loan...
US employers unexpectedly lost 23,000 jobs in July and gains for the previous two months were...
