Moody’s to pay Iowa $9 million

DES MOINES - Moody's Investor Service and two affiliates will pay Iowa some $9 million as part of a nearly $863 million joint federal-state settlement in connection with claims the credit-rating company inflated ratings of mortgage-backed securities that led to the 2008 financial crisis.

The settlement is part of a deal with the U.S. Department of Justice, 20 other states and the District of Columbia, Iowa Attorney General Tom Miller said in a statement.

'The 2008 housing collapse was amplified by Moody's putting its own profits ahead of the interests of investors it claimed to serve,” Miller said. 'We are holding Moody's accountable for harming investors and our economy.”

Moody's Aaa rating carried a greater level of risk than it indicated to consumers and investors, investigators found. Moreover, they also determined that Moody's gave better ratings to big banks' securities in exchange for being paid large fees, Miller's statement said.