Police raid Milan offices of Moody's and Standard & Poor's

[redrumloa]

Police raid Milan offices of Moody's and Standard & Poor's

News broken by corespondent Fluffy McDeath in another thread!

As stock and bond markets across the world tumbled on fears about Italy and Spain, it emerged that police acting on orders from prosecutors had raided the Milan offices of rating agencies Moody's and Standard & Poor's as part of continuing investigations into their role in the recent financial turmoil.
Italian shares plunged on Thursday, with some leading firms losing more than 10% of their value. But the closing level of the benchmark FTSE MIB index was not released for reasons that remained unclear more than an hour after the close.

What a scoop!!!

 

[Glaucus]

Sounds like a fishing expedition. I'm sure whatever they find will be handed over to the FBI/US gov (since they can't do it themselves).

 

[metalman]

Government oversight committees criticized Ratings Agencies for giving high-risk mortgage-backed securities top ratings and not foreseeing the housing bubble. Now their criticized for questioning how much debt a government can support.

 

[FluffyMcDeath]

Sounds like a fishing expedition. I'm sure whatever they find will be handed over to the FBI/US gov (since they can't do it themselves).

Fishing? Maybe but I'd think it's a pre-emptive strike. Italy is teetering itself and has been in line for a downgrade. I don't doubt that the ratings agencies are dodgy and quite probably corrupt but proving it is always a nightmare. It's also a hard sell PR-wise. People fall asleep trying to follow a trail of technically illegal but convoluted events.

However, if you are expecting a downgrade and you raid the ratings agencies then they can't downgrade you without making it look like revenge. You undermine their appearance of impartiality when you raid them and then anything they do against you after the fact also looks partial and political.

I'm sure the guys doing the investigation are eager to find something but I think the guys that ordered it would be satisfied with just the optical outcome.