May 10, 2010
Moody’s finally fesses up
to the fact that they received a Well’s notice from the SEC;
this time around things could be different as Moody’s might
officially be put out of business. It could actually lose
the right to be a rating agency, which in our opinion would
be a magnificent move.
Moody’s Corp has
disclosed that its credit rating unit could face enforcement
action from the US Securities and Exchange Commission for
allegedly misleading regulators in a 2007 application to
remain a nationally recognized rating agency. Moody’s said
in a filing late on Friday that the SEC is mulling starting
an administrative case and "cease-and-desist" proceedings,
and that a so-called "Wells Notice" was received from the
SEC on March 18.
Regulators send Wells
Notices to firms or people to alert them of the likelihood
that the government will file an enforcement action against
them. Companies or people being investigated have the right
to argue why they should not be charged by filing a "Wells
submission." According to Moody’s filing, the SEC claims the
Moody’s description of its procedures for determining credit
ratings was "false and misleading" because of Moody’s own
finding that a policy had been violated internally.
In the filing, Moody’s
said it disagrees with the SEC and said it had sent a
response explaining why its application was accurate and why
it believes enforcement is uncalled for.
Full Story
Off course Moody’s is
going to disagree with the SEC’s finding; those that make a
living by sucking blood from others try to deny it until the
very end. This same punishment should be levied against all
the rating agencies that failed to do their job; rating
agencies that mislead should be banned forever so that the
message is clear, do your job or die. Of more importance
though, is the fact that insiders appeared to have acted on
this information in a manner that would enable them to get
the best price before this knowledge became public.
Consider the following
info
Moody’s CEO Dumped 100,000
shares of stock the day the Well’s notice arrived. The well
notice arrived on 18th of March; this once again clearly
illustrates how corporate America is all about making money
at the expense of its shareholders. However, sales by
Buffets Company make CEO Raymond McDaniel sales seem very
small; they unloaded a boat load of shares, the largest
block was sold on the exact day that MCO received the
notice. The timing of these transactions and the size leave
one wondering if Berkshire Hathaway might have been privy to
some inside info; take a look at the transactions. We are
not stating that Buffet’s company did anything wrong, but
the timing of these transactions does make one wonder.
18th of March
678,962 shares at 29.98 a share
19th of March
136,943 shares at 29.81 a share
23 march 148,054 shares at
30.22 a share
24th march
54,574 shares at 30.37 a share
26th march
3,000 shares at 30.56 a share
VIP Futures 1 year win ratio 84.6%
VIP Futures Win ratio for 2010, 100%
VIP futures 5 year win ratio 75%
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