Moody's Cost US Billions, Says Ex-Analyst's FCA Suit

By Brandon Lowrey (August 22, 2014, 10:28 PM EDT) -- A former Moody's Corp. analyst accused the credit rating firm of giving false ratings to toxic mortgage-backed securities in the lead-up to the 2008 financial crisis, costing the government billions of dollars, in a massive False Claims Act complaint unsealed Friday after the government declined to intervene.

Ilya Kolchinsky's 107-page complaint, filed in February 2012, alleges Moody's issued high ratings from 2004 to 2007 for the vast majority of U.S. residential mortgage-backed securities and collateralized debt obligations.

"Unbeknownst to investors, these ratings were not the product of independent, objective calculation, but rather the result of concealed conflicts of interest and Moody's...

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