Former Moody’s Executive Attacks Ratings Agencies

November 3, 2011 by · Leave a Comment
Filed under: Moodys, The Rating Agencies 

William Harrington, a former senior president at Moody’s Investor’s Services, was sharply critical of how Moody’s and the other rating agencies conduct business. He claimed that the organization’s senior management would routinely interfere with analysts’ assessments.

Mr. Harrington, who resigned in 2010 after 11 years with Moody’s, said in a statement filed with the Security and Exchange Commission (SEC) that Moody’s had a culture of “intimidation and harassment” to ensure analysts awarded ratings that were wanted by clients. He said that the compliance department would “actively harasses analysts viewed as ‘troublesome.’”

He continued to explain that, “This salient conflict of interest permeates all levels of employment, from entry-level analyst to the chairman and chief executive officer of Moody’s corporation.”

In his 78-page filing, he also said, “The goal of management is to mold analysts into pliable corporate citizens who cast their committee votes in line with the unchanging corporate credo of maximizing earnings of the largely captive franchise.”

Mr. Harrington’s opinion must be taken in the context of a former employee.

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