<p align= justify >The complaint alleges violations of the Securities Exchange Act of 1934. Moody’s Corporation, through its subsidiaries, provides credit ratings, research, and analysis covering fixed-income securities, other debt instruments and the entities that issue such instruments in the global capital markets. Among other things, the Company assigns ratings to mortgage bonds comprising risky “subprime” home loans , including bonds packaged as “collateralized debt obligations” and other securities backed by subprime assets. Investors rely on these ratings to assess the value and risk of these investments. While the nation’s housing market was booming, Moody’s reaped millions of dollars in fees for assigning ratings to subprime-mortgage-backed securities.</p> <p align= justify > </p>
<p align= justify >Specifically, the complaint alleges that throughout the Class Period, Defendant misrepresented or failed to disclose that the Company assigned excessively high ratings to bonds backed by risky subprime mortgages including bonds packaged as collateralized debt obligations - which was materially misleading to investors concerning the quality and relative risk of these investments. Moreover, even as a downturn in the housing market caused rising delinquencies of the subprime mortgages underlying such bonds, Moody’s maintained its excessively high ratings, rather than downgrade the bonds to reflect the true risk of owning subprime-mortgage-backed debt instruments.</p>
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<p align= justify >Then, on July 11, 2007, Moody’s shocked investors when it announced that the Company was downgrading 399 mortgage-backed securities issued in 2006 and reviewing an additional thirty-two for downgrade, affecting approximately $5.2 billion of bonds. The Company also disclosed that it had downgraded 52 bonds issued in 2005.</p>
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<p align= justify >A similar, purported class action complaint has also been filed in the U.S. District Court for the Southern District of New York.</p>