CalPERS Nets $130M In Suit Alleging Moody's Gave Strong Scores To Bad Investments
SACRAMENTO (CBS/AP) -- The nation's largest public pension system says Moody's has agreed to pay $130 million to settle a lawsuit alleging the investment rating agency negligently gave strong scores to bad investments.
The California Public Employees' Retirement System (CalPERS) announced the settlement on Wednesday.
CalPERS alleged the agencies assigned AAA credit ratings to investments backed by risky subprime mortgages and sued Moody's and other rating agencies in 2009 after sustaining steep losses during the financial crisis.
Standard & Poor's settled with CalPERS last year for $125 million.
CalPERS General Counsel Matthew Jacobs says the settlement restores money that belongs to workers and retirees.
Moody's could not be reached for comment after business hours, but Moody's spokesman Michael Adler told the Los Angeles Times the settlement is in the best interest of the company and its shareholders.
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