The first sentence of a Washington Post article on the decision by the SEC not to pursue legal action against the company told readers that the rating agency “misjudged” many securities that subsequently plunged in value. This assertion is exactly what is in dispute.

The rating agency clearly mis-rated many securities, giving investment grade ratings to issues that were clearly junk, at least in retrospect. The question is whether the erroneous ratings were honest mistakes — misjudgements — or whether they were due to fact that Moody’s knew that issuers wanted investment grade ratings and would not hire them in the future if they could not be relied upon to produce such ratings. The Post has somewhere determined that Moody’s just made honest mistakes and told readers so in the very first sentence.