Today, Judge Pauley dismissed a False Claims Act case (described as a “sprawling . . . Homeric ‘Catalogue of Ships’ for the 2008 financial crisis”) brought against ratings agency Moody’s by a former managing director. The amended complaint alleged that Moody’s lack of independence and conflicts of interest led to false credit ratings that caused a myriad of “false payments” by the government, ranging from underpayment of FDIC premiums to an overvaluation of the AIG bailout.
Judge Pauley found that in order to succeed, the plaintiff would have to show that the government (not a private entity) had relied on Moody’s false ratings or that Moody’s had directed other financial institutions to submit false claims to the government. The allegations in the amended complaint did not meet this requirement:
Continue Reading Judge Pauley Dismisses False Claims Act Case by Moody’s Whistleblower