Indiana will receive more than $12 million as part of a multi-state settlement involving Moody’s Corp. The nearly $864 million, 21-state settlement is the result of allegations that Moody’s misled investors leading up to and through the 2008 financial crisis.
Indiana Attorney General Curtis Hill’s office says the investigation concerned Moody’s "representations of independence and objectivity in the rating of structured finance securities." Those securities were at the heart of the financial crisis. The U.S. Department of Justice says Moody’s analysts were influenced by the opportunity to earn lucrative fees from investment bank clients when they assigned higher credit ratings to toxic assets.
Moody’s has also agreed to significant compliance terms as they move forward in conducting their ratings activities. That includes an annual certification by Moody’s Corporation’s chief executive officer, which will be provided to Indiana and the other states involved for each of the next four years.
In 2015, Indiana received $21.5 million from a similar settlement with Standard & Poor’s.
Where the money will be used by the state has yet to be determined. Corey Elliot, spokesman for the Attorney General’s Office, released a statement that said:
Due to the recent timing of the announcement of the Moody’s settlement, the Office of the Indiana Attorney General and the Secretary of State are still collaborating to determine the next steps, including allocation, which will be done consistent with state law and the terms of the settlement agreement. We hope to have more information in light of this positive outcome soon.