A former executive at Moody’s Investors Service filed a civil suit in federal court today in Manhattan, alleging that the ratings agency defamed him after he flagged problems with their ratings. (Read the full complaint [1].)
During his time at Moody’s and after his employment there ended in 2009, Eric Kolchinsky, the plaintiff, said he raised concerns [2]—several times to his employers, then to congressional investigators, and finally to a
House panel last fall [3]—about securities fraud and inflated ratings at Moody’s.
According to the complaint, Kolchinsky’s concerns were publicly countered by Moody’s with attacks and attempts to discredit him. In September 2009, a Moody’s spokesman told the Wall Street Journal that
Kolchinsky “refused to cooperate [3]” with an internal investigation. A month later, The Wall Street Journal quoted CEO Raymond McDaniel calling his allegations “not supported by the facts [4]” and “without merit.”
“Moody’s repeatedly and publicly published falsehoods about Mr. Kolchinsky, the tone and purpose of which was to cast dispersion [sic] on his credibility as a ‘whistleblower’ and to disgrace and ridicule his work and reports,” the complaint reads. “Moody’s claims were intended to make Mr. Kolchinsky seem like an unprofessional, disgruntled employee who files claims and performs faulty analysis, based on unmeritorious statements.”
Read on.
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