The credit ratings agencies have tenaciously fought attempts by private plaintiffs to hold them liable for investment losses stemming from the financial crisis. But current and former officers and directors of Moody’s Corporation aren’t averse to settling a derivative lawsuit for some purported corporate governance reforms. On July 19, the derivative parties filed a proposed settlement with Southern District Judge George Daniels (See Profile).
The deal does not seem to require much of the officers and directors nor the company. The defendants have to pay only $4.9 million in plaintiffs attorney fees. Instead, the settlement mandates that the company commit to various ethical business practices. Among other things, Moody’s must post a new mission statement on its website detailing its “Core Objectives,” which are aimed at producing independent ratings, and its top executives must communicate that message to the workforce. The ratings agency isn’t conceding that it engaged in any wrongdoing.
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