Hey, Moody's, Why Didn't You Tell Us About The SEC "Wells Notice" In March?

Raymond McDanielRaymond McDaniel, Moody’s CEO

Moody’s stock (MCO) is getting slammed this morning on the shocking news that the SEC has hit it with a “Wells Notice” that could lead to the SEC’s preventing the company from acting as a rating agency.How did the market learn about the Wells Notice? 

Because Moody’s was apparently forced to disclose it in its latest SEC filing. (The company tried to hide the news deep in the 10Q, even burying it within a broader paragraph, but investors found it).

So here’s our question: If the Wells Notice is material enough for Moody’s to have to disclose it in a 10Q–which it certainly seems to be–why wasn’t it material enough for the company to disclose two months ago, on March 18th, when Moody’s received it?

Wouldn’t investors who bought Moody’s in the two months since the middle of March have wanted to know that the SEC might well tell Moody’s to “cease-and-desist”?  We certainly would have.

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