The German subsidiary of Moody’s has been sanctioned for breaching rating agency rules by European regulators.
The European Securities and Markets Authority (ESMA) fined Moody’s Deutschland GmbH €2.15 million for violating the rules governing rating agencies by filing incorrect data to the regulator.
“Moody’s Germany failed to ensure that the information about credit ratings and rating outlooks reported to ESMA … was correct,” the regulator said in a notice Thursday.
The filing errors included missing ratings and rating actions, non-withdrawn ratings and errors in the information submitted to the regulator, it noted.
“This meant the data available to ESMA was unreliable,” it said, adding that the errors only affected data submitted to ESMA; it didn’t impact its public credit ratings.
ESMA said it also identified deficiencies in Moody’s Germany’s regulatory reporting framework, “including its policies, procedures and internal control mechanisms.”
“Moody’s Germany breached the CRA regulation by failing to provide complete, accurate and up-to-date data to ESMA,” said Verena Ross, chair of ESMA, in a release.
“High quality, reliable reporting is critical for detecting risks and maintaining transparency in EU financial markets,” she added.