Moody’s fined €1.24m for breaching credit rating rules

The European Securities and Markets Authority (ESMA) said it fined Moody’s Deutschland GmbH (Moody’s Germany) €750,000 and Moody’s Investors Service Limited (Moody’s UK) €490,000, and issued a public notice for two negligent breaches of the Credit Rating Agencies Regulation (CRAR).

“ESMA found that Moody’s Germany and Moody’s UK negligently committed two infringements of the CRAR regarding their public announcement of certain ratings and their public disclosure of methodologies used to determine those ratings,” said ESMA.

“These failures concern nineteen ratings issued between June 2011 and December 2013 for nine supranational entities including the European Investment Bank, the European Investment Fund, the European Stability Mechanism, the European Financial Stability Facility and the European Union.”

ESMA said the public announcement of 19 ratings issued by Moody’s Germany and Moody’s UK between June 2011 and December 2013 “included no other material sources of public information than press releases.”

It said these announcements failed to indicate the principal methodology used for the ratings decisions and failed to refer to any comprehensive descriptions of the methodology used.

Further, ESMA said the methodology used in each of the 19 ratings issued by Moody’s Germany and Moody’s UK between June 2011 and December 2013 “was not the subject of any separate public disclosure either before or after the public rating announcements.”

This Infringement continued for more than six months.

 

Moody’s Germany and Moody’s UK may appeal the decision to the Board of Appeal of the European Supervisory Authorities.

“Such an appeal does not have suspensive effect, although it is possible for the Board of Appeal to suspend the application of the decision in accordance with Article 60(3) of the CRA Regulation,” said ESMA.

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.