ESMA Fines Moody’s Over Disclosure Failures Regarding Berkshire Hathaway
Posted on 03/30/2021
The European Securities and Markets Authority (ESMA) “pinched” credit ratings firm Moody’s Corp. with a €3.7 million fine. The fine was for violating rules that includes the failure to disclose conflicts of interests. The breaches were caused from Moody’s negligence. The breaches took place between 2013 and 2017. For ESMA, there is a rule that prevents rating agencies from issuing ratings on companies in which they own 10% or more of its shares, or where they have a board position. Warren Buffett’s Berkshire Hathaway Inc. is Moody’s largest shareholder, with an estimated 13% of its shares.
ESMA disclosed the fine was for five Moody’s entities based in France, Germany, Italy, Spain, and Britain.
Berkshire Hathaway targets public companies, often taking large ownership positions.