(Bloomberg) -- Moody’s Corp. said federal officials are planning a civil lawsuit over its ratings of residential mortgage bonds in the years leading up to the 2008 financial crisis.
The U.S. Department of Justice is preparing a civil complaint alleging violations of the Financial Institutions Reform, Recovery, and Enforcement Act, Moody’s said today in a statement, citing a Sept. 29 letter from the agency.
The investigation “remains ongoing and may expand to include additional theories,” and unspecified state attorneys general have told the company they expect to pursue similar claims that may expand in terms of time periods, theories, asset classes or activities, Moody’s said.
The company is continuing to respond to subpoenas and inquiries, Moody’s said. Michael Adler, a spokesman for New York-based Moody’s, declined to elaborate on the statement. Representatives at the Justice Department didn’t immediately respond to a voicemail message.
The Justice Department has been investigating Moody’s role in the financial crisis for years, including allegations that it inflated ratings on mortgage bonds at the heart of the 2008 financial meltdown.
In March, Moody’s agreed to pay $130 million to settle claims by the California Public Employee Retirement System over allegedly inflated ratings on residential-mortgage bond deals. Standard & Poor’s Corp. paid $1.5 billion in 2015 to resolve U.S. allegations that it inflated ratings to gain business during the housing boom. S&P said at the time it settled to avoid the “delay, uncertainty, inconvenience, and expense” of litigation.