Moody's fined: Agency admits to false credit ratings


The Moody's logo is shown outside the offices of Moody's Corporation in New York, New York, USA. The ratings agency has downgraded of South Africas debt rating to one level above junk status, putting further pressure on the economy.

JOHANNESBURG - Ratings agency Moody’s has agreed to fork out R11.7 billion in penalties for its role in the US 2008 financial crisis.

It's been fined for issuing false credit ratings that eventually led to the resulting market crash.

A probe has found that Moody’s issued high ratings to sub-prime home loans, which later collapsed in 2007.

In some cases, credit ratings firms gave out top grades to junk deals, in order to secure business from the banks.

READ: Moody's cuts SA credit rating outlook

Last year, S&P Global Ratings also paid about R26 billion fines on similar charges.

Moody’s, S&P and Fitch account for the lion’s share of the ratings market at 96 percent.