MANHATTAN (CN) - A former managing director can pursue claims that Moody's fired him for threatening to report fraud in its ratings methodology, a federal judge ruled.
Ilya Eric Kolchinsky, a former managing director for Moody's derivatives group, claimed that he learned on Sept. 10, 2007 that the ratings agency used old methodologies that violated federal securities laws.
Kolchinsky claimed that his direct supervisor was "nonresponsive" to his concerns, so he took matter to Moody's Head of Credit Policy.
Less than 2 weeks later, Moody's issued a press release announcing new ratings methods, Kolchinsky said in his complaint.
He claimed he was later removed from the derivatives group, kept out of development meetings and his pay and bonuses were cut. He complained on Sept. 12, 2008 to Michael Kanef, Moody's chief regulatory and compliance officer, according to the Opinion and Order issued this week by U.S. District Judge Paul Crotty.
"Kanef investigated Kolchinsky's allegations, but Kanef had conflicts of interest since he oversaw the group that rated residential mortgage-backed securities and was involved in setting Moody's ratings policies for those securities," Crotty wrote in his 15-page ruling.
Kanef told Kolchinsky to direct any future complaints to Moody's lawyers - first, at Sullivan & Cromwell, then at Kramer Levin Naftalis & Frankel, according to Crotty's summary of the case.
Ilya Eric Kolchinsky, a former managing director for Moody's derivatives group, claimed that he learned on Sept. 10, 2007 that the ratings agency used old methodologies that violated federal securities laws.
Kolchinsky claimed that his direct supervisor was "nonresponsive" to his concerns, so he took matter to Moody's Head of Credit Policy.
Less than 2 weeks later, Moody's issued a press release announcing new ratings methods, Kolchinsky said in his complaint.
He claimed he was later removed from the derivatives group, kept out of development meetings and his pay and bonuses were cut. He complained on Sept. 12, 2008 to Michael Kanef, Moody's chief regulatory and compliance officer, according to the Opinion and Order issued this week by U.S. District Judge Paul Crotty.
"Kanef investigated Kolchinsky's allegations, but Kanef had conflicts of interest since he oversaw the group that rated residential mortgage-backed securities and was involved in setting Moody's ratings policies for those securities," Crotty wrote in his 15-page ruling.
Kanef told Kolchinsky to direct any future complaints to Moody's lawyers - first, at Sullivan & Cromwell, then at Kramer Levin Naftalis & Frankel, according to Crotty's summary of the case.
No comments:
Post a Comment