Article: Moody's Raters Violated Rules; Employees Improperly Ranked European Bonds, Company Says

Moody's, the world's second-largest credit-rating company, ousted the head of its structured-finance unit and said employees violated internal rules in assigning ratings to last year's worst-performing securities.

Noel Kirnon, 47, will leave after a company review showed that some staff members at Moody's Investors Service breached rules for ranking European constant proportion debt obligations, or bonds backed by derivatives, the company said in statements yesterday. Moody's awarded Aaa ratings to at least $4 billion of CPDOs, as the securities are known, before they lost as much as 90 percent of their value.

U.S. and European regulators are tightening rules for Moody's, Standard & Poor's ...

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