The head of sovereign debt rating is leaving Moody’s (NYSE: MCO). The company has been under withering criticism for its evaluations of mortgage-backed debt and paper issued by the treasuries of independent country’s. Moody’s recently downgraded Greece, Spain, and Portugal–better late than never.
According to Reuters, The decision by Pierre Cailleteau “to leave was his own and was not related to market events or recent criticisms of rating agencies, the Moody’s spokesman said.”
Not likely. Moody’s may be charged by Congress and several state attorneys general for its careless or perhaps premeditated actions of giving high ratings to troubled paper. Some of the accusations of the firm center around conflicts of interest over whether ratings were “bought” by fees paid by clients with a financial interest in the outcome.
One of the greatest blows to Moody’s fortunes recently is that Warren Buffett, at one point the largest shareholder in the company, sold his entire position. And, this is a man who continues to hold his stake in The Goldman Sachs Group (NYSE: GS).
Douglas A. McIntyre