Special Commission Looking Into Financial Meltdown Hits Moody’s With Subpoena For Not Cooperating


It’s a sort of chicken and egg type question: which was worse, the financial institutions that sold toxic, mortgage-backed investments to the the public, or the rating agencies that claimed the investments were just fine?

The Financial Crisis Inquiry Commission (FCIC) is a bi-partisan panel created by Congress. Its purpose is to try and learn what actually caused the global financial meltdown we are still recovering–or trying to recover–from.

Today, the panel turned its sights on one of the major ratings agencies, Moody’s Corporation, issuing a subpoena “for failing to comply with a request for documents in a timely manner,” according to a news release put out by the special commission.

“In seeking documents and testimony from public agencies and companies, the Commission has made it clear that it is committed to using its subpoena power if there is a lack of, or delay in, compliance,” says the release. “Failure to comply with a Commission request is viewed with the utmost seriousness, as the Commission will not be deterred from getting desired information.”

Agencies such as Moodys played a key role in the financial debacle and there are those who view with suspicion the fact that such ratings agencies get paid by the very companies whose investment instruments they are evaluating.

In the end, there may not be a better way for these agencies to do their business. But the public needs to have a much better understanding of all the relationships involved.

It is unfortunate that Moody’s Corporation is apparently dragging its heels.

The conclusions of the special Commission will be given to Congress and the White House by the end of this year.

About Author

Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog, as well as on The Huffington Post.


  1. As you noted, these agencies are paid by the companies whose product they are evaluating. Does them make them biased? Well, I know that when I was a kid, if it was close to the time I would be getting my allowance, then I certainly didn’t rock the boat.

  2. Why isn’t the commission looking into the real source of the financial crisis–the politicians who curried votes by forcing regulators to force lending institutions to loosen up on lending requirements? Oh–I get it! That would mean investigating themselves. But anything else is just window dressing. Thank you for your consideration of my comment.

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