The federal government’s Financial Crisis Inquiry Commission has subpoenaed Moody’s Corp. for allegedly failing to provide requested information.
Last May, Congress enacted the Fraud Enforcement and Recovery Act, which created the FCIC and charged it with figuring out what caused the financial crisis.
The 10-member, bipartisan commission is examining 22 facets of the crisis, including financial institutions’ reliance on rating agencies and the use of ratings in regulation and securitizations.
The commission has the power to hold hearings and subpoena witnesses and documents. It expects to deliver a report on the crisis in December.
FCIC chairman Phil Angelides said in a statement that the commission has made it clear it intends to use its subpoena power to compel cooperation from people or companies who do not provide the information it wants.
This is the first time the FCIC has subpoenaed documents.
Former New York Gov. Eliot Spitzer a week ago said the FCIC has “so far been a waste,” mainly because it had not issued a single subpoena. The FCIC has subpoenaed two witnesses, but until now no documents.
“Moody’s has and continues to devote substantial resources to producing documents and making our people available to the FCIC, our regulators, state attorneys general, Congress and many others tasked with understanding the financial crisis and the role of the rating agencies,” Moody's said in a statement. “We continue to work to provide useful and appropriate responses to these inquiries.”
Shares of Moody's slipped 5.3% yesterday to $25.69.
