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- Obama ‘cavalier’ in hiding foreign aid order, judge rules
- Prince Charles: Muslims are driving Christians from Mideast through persecution
- Gitmo’s first commander: Close the prison down
- Google’s newest photography find: Just wink and shoot
- Detroit’s Heidelberg art project hit by 8 fires in 8 months
- Pa. police pull people over for random DNA tests for feds
- NASA pushing hard to get back into space game
- Harvard student to face federal charges for bomb hoax
- Ronnie Biggs of ‘Great Train Robbery’ fame dies, 84
Inquiry batters Moody’s for 2nd day
Shares of Moody's Corp., owner of the second-largest credit-rating company, fell for a second day after a probe began into whether executives covered up a computer error that gave top rankings to securities that didn’t deserve them.
Moody's stock dropped 21 percent over two days as lawmakers and prosecutors intensified scrutiny of the company’s credit-rating unit. Connecticut Attorney General Richard Blumenthal said Wednesday he is investigating New York-based Moody's for potential fraud in connection with a possible “coverup” of inaccurate ratings. Sen. Charles E. Schumer, New York Democrat urged regulators to examine the matter and fine the company if it delayed disclosing the mistake to investors.
Moody's has been under siege since July, when top-rated debt began tumbling as defaults on subprime mortgages soared to record numbers. The company said Wednesday it is conducting “a thorough review” of whether a computer glitch caused it to assign Aaa rankings to about $4 billion of European securities that later fell in value.
“It’s a credibility issue,” said Ed Atorino, an analyst at Benchmark Co. in New York. “Sure, they’re hurt, they’re damaged. They’ve tried to get out from under and things keep happening.”
Moody's, which is 19.6 percent owned by Berkshire Hathaway Inc., fell $2.40, or 6.5 percent, to $34.51 in New York Stock Exchange trading. The stock slumped 16 percent Wednesday, the biggest decline since Aug. 20, 1999. It’s down 49 percent in the past year.
Warren Buffett, chairman of Berkshire Hathaway Inc., yesterday urged Moody's to fire employees if the investigation finds they did “things they shouldn’t have done.”
“If people did the wrong thing, they obviously should go,” Mr. Buffett said at a news conference in Milan, Italy.
By John R. Bolton
The president fiddles at his domestic altar while the world burns
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