The New York Times
Thu, May 13, 2010 -- 12:00 AM ET
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New York Said to Be Investigating Banks' Influence on Ratings Agencies
The New York attorney general has started an investigation of
eight banks to determine whether they provided misleading
information to rating agencies in order to inflate the grades
of certain mortgage securities, according to two people with
knowledge of the investigation.
The agencies themselves have been widely criticized for
overstating the quality of many mortgage securities that
ended up losing money once the housing market collapsed. The
inquiry by the attorney general of New York, Andrew M. Cuomo,
suggests that he thinks the agencies may have been duped by
one or more of the targets of his investigation.
Those targets are Goldman Sachs, Morgan Stanley, UBS,
Citigroup, Credit Suisse, Deutsche Bank, Crédit Agricole and
Merrill Lynch, which is now owned by Bank of America.
The companies that rated the mortgage deals are Standard &
Poor's, Fitch Ratings and Moody's Investors Service.
Investors used their ratings to decide whether to buy
mortgage securities.
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