Moody’s to pay state $26 million for ‘deceptive conduct’

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One of the nation’s largest ratings agencies will pay Mississippi more than $26 million to settle allegations that the company participated in deceptive conduct during the Great Recession.

Attorney General Jim Hood said Tuesday that Moody’s agreed to pay $863.8 million to 21 states and the District of Columbia.

A Hood lawsuit alleged that “Moody’s ratings of structured finance securities were tainted by the company’s drive to win business and its concerns for market share. Structured finance securities, particularly those comprised of sub-prime mortgages, were at the center of the financial crisis.”

The settlement also included Moody’s agreement to put policies in place to prevent similar problems from arising in the future.