Remember how the impartial accountancies lost their way during the tech bubble? The most egregious case was Arthur Andersen’s wrongdoings at Enron, which eventually bankrupted both Enron and Arthur Anderson.
Well in this particular crisis it looks like the rating agencies are getting ready to take it on the chin. The state of Connecticut has sued Moody’s S&P and Fitch. I certainly see the rating agencies, with their AAA ratings for highly suspect CDOs, as complicit in the whole Ponzi scheme built on sub-prime and other dodgy assets. Apparently the Connecticut Attorney General agrees.
Connecticut Attorney General Richard Blumenthal plans to cite Moody’s Investors Service, Standard & Poor’s and Fitch Ratings, the three biggest credit-rating companies, for “deceptive and unfair practices.”
The firms’ conduct is costing taxpayers “millions of dollars,” according to an e-mailed statement today from Blumenthal’s office announcing plans for “legal action.”
Interestingly, Moody’s biggest Shareholder is Warren Buffett’s Berkshire Hathaway.