Who would have guessed that Moody's would do something shady?
I have been blasting Moody's (MCO) and Standard & Poors (MHP) for a while now, complaining that they were as responsible as anyone for the financial meltdown yet they have somehow have been able to retain their government-mandated oligopoly status. My MCO short is one of the few CAPS trades that I refuse to close no matter what, as a matter of principle.
It appears as though the ratings agencies may finally be getting theirs. Moody's recently disclosed in its 10Q (late Friday of course) that the SEC has given it a "Wells Notice," which essentially means that it is getting ready to file a formal complaint against the company.
As I said, Moody's just notified shareholders that it is being investigated by the SEC. Guess when it found out about the investigation...March 18th. Ahhhhh, shouldn't Moody's have notified shareholders about this investigation earlier than nearly two months after the fact?
You know who did know about the investigation, Moody's CEO Raymond McDaniel. Interestingly, he just happened to sell one hundred thousand shares of MCO stock at $29 and good old Uncle Warren Buffett unloaded nearly a million shares of the company immediately following Moody's receipt of the Well's Notice. Coincidence? Perhaps, but still it sure looks bad.
I hope that Moody's gets hammered.
Moody’s Stock Still Pressured by S.E.C. Inquiry Disclosure
Short MCO in CAPS, but not in real life (though not for lack of trying)