Ex-Moody’s Exec: Don’t Trust Ratings

Apparently some of the credit-rating agencies’ employees don’t trust them: having worked at Moody’s for 11 years before resigning, William Harrington, a former senior president, filed a complaint to the SEC Monday saying credit-rating agencies suffer a “conflict of interest” because they are paid by banks and other big companies, but are supposed to rate them without bias. It’s nearly impossible for analysts to do so knowing that they need to please their clients, he says. Harrington adds that Moody’s created a culture of “intimidation and harassment” directed at analysts, where a compliance department “actively harasses analysts viewed as ‘troublesome.’” He also alleges that management “rewarded lenient voting.”