KSF News, Updates, & Insights

Court Approves Landmark Settlement in Moody’s Corporation Derivative Litigation

On September 6, 2012, Judge George Daniels of the Southern District of New York approved a comprehensive and wide-ranging settlement of the Moody’s Corporation Derivative Litigation, in which KSF served as Lead Counsel for the demand-excused cases. Moody’s and other settling defendants agreed to adopt or maintain detailed corporate governance, internal control, risk management, internal compliance, and Board reporting provisions–all designed to identify, monitor, and address regulatory and compliance issues across the operations of Moody’s Investors Service, one of the prime credit rating agencies allegedly responsible for the 2008 financial crisis. The litigation had asserted various claims, including breach of fiduciary duty, in connection with Moody’s ratings of various mortgage-backed and structured securities before the downturn–alleging that the company had allowed commercial pressures and the drive for market share to interfere with its traditional focus on ratings accuracy, honesty, and integrity.

The settlement was supported by the enthusiastic endorsement of leading experts in the fields of corporate governance, finance, and ratings industry practices. KSF represented the Louisiana Municipal Police Employees Retirement system, a statewide retirement fund for thousands of municipal police and police employees which actively monitors U.S. public companies for corporate oversight and best practices. R. Randall Roche, Esq., LMPERS’s general counsel, stated, “I am enormously pleased with this settlement, which shows that one of the organizations most responsible for the 2008 downturn has finally begun to redeem itself.”