The European Union’s markets regulator has fined Moody’s (MCO.N) 1.24 million euros ($1.4 million) for failing to give investors sufficient information about how ratings on major institutions such as the EU were compiled.
The European Securities and Markets Authority (ESMA) said Moody’s German and UK branches “negligently committed two infringements of the Credit Rating Agencies Regulation regarding their public announcement of certain ratings,” ESMA said in a statement on Thursday.
The failures relate to 19 ratings issued between June 2011 and December 2013 for nine international bodies, including the European Investment Bank, the European Investment Fund, the European Stability Mechanism, the European Financial Stability Facility, and the European Union itself.
Moody’s gave too little public information about how the ratings were arrived at, making it harder for investors to check and verify they were sound and reliable, ESMA said, adding that the only public information available was a press release.
Moody’s said it acknowledged ESMA’s findings and was pleased that the matter was now closed. “None of the findings related to the quality of our ratings or the supranational methodology itself,” Moody’s European spokesman Daniel Piels said. “ESMA also recognized that Moody’s took steps in 2013 to ensure that similar infringements did not occur in the future.”