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.
After reporting dismal fourth-quarter earnings, Radio Shack said Tuesday that it would close about 1,100 poorly...
Staples Inc (SPLS.O), the largest U.S. office supplies retailer, forecast another quarter of sales decline...
State and local governments have awarded at least $110 billion in taxpayer subsidies to business, with...
