Hey, Moody's, Why Didn't You Tell Us About The SEC "Wells Notice" In March?

Business Insider ^ | May. 10, 2010 | Henry Blodget

[george76]

Moody's stock (MCO) is getting slammed this morning on the shocking news that the SEC has hit it with a "Wells Notice" that could lead to the SEC's preventing the company from acting as a rating agency.

How did the market learn about the Wells Notice?

Because Moody's was apparently forced to disclose it in its latest SEC filing. (The company tried to hide the news deep in the 10Q, even burying it within a broader paragraph, but investors found it).

So here's our question: If the Wells Notice is material enough for Moody's to have to disclose it in a 10Q--which it certainly seems to be--why wasn't it material enough for the company to disclose two months ago, on March 18th, when Moody's received it?

[george76]

Chairman and CEO of Moody's sold a crapload of stock on 3/18.

Berkshire Hathaway sold $30M plus starting on 3/18.

Purely a coincidence, I'm sure.

ht comments

[the invisib1e hand]

Apparently receipt of a Well's Notice isn't cause for disclosure. It's only a "notice" after all, it's not a legal action. GS had the same situation and probably it's common. It doesn't mean it's "wrong" just because the media decides to get all moralistic at a moment that's convenient for...for whomever the media serves.

Besides, these firms are staffed by and retain the most expensive lawyers. Don't you think that, if it were disclosable, they'd have done so?

That doesn't mean Moody's isn't a mere shell of itself, ethically.

RIP, John Moody.

[Eric in the Ozarks]

There should be a federal investigation of all the ratings agencies and fines plus prison time should be meted out to those who lied or hid the value of so many mortgages.
If there were one group that could be said to have done the deed, (besides the Donks in congress) it would be Moody's, et al.

[illiac]

I’m curious about this whole thing. Moody’s may be lowering the US ratings and they are served with a Wells Notice.

Something fishy here....

[WKUHilltopper]

I’ve never had such a lack faith in the markets before. I’m sure we WON’T be seeing “insider trading” charges levied on the trades you’ve mentioned.

[Piranha]

I agree. I think this is political vengeance. Remember, the head of the SEC, Mary Schapiro, forced through a disclosure obligation on global warming.