Chairman & CEO of Moody’s Corp. (MCO) Raymond W. Mcdaniel sold 100,000 shares of MCO on March 18, 2010, at an average price of $29 a share, BusinessInsider reports. Incidentally, the dumping of the shares coincides with the date the ratings agency received a “Wells Notice” from the Securities and Exchange Commission.
The SEC sends a Wells notice when it considers bringing a civil action against a company or individual.
In a 10Q-SEC filing late Friday, Moody’s said that SEC staffers are in the process of recommending that the commission “institute administrative and cease-and-desist proceedings” against Moody’s concerning “false and misleading” descriptions of its credit-rating policies.
As gurufocus records show, Moody’s waited nearly two months before disclosing Mcdaniel’s stock sale to its investors.
Coincidentally, or not, Warren Buffett’s Berkshire Hathaway (BRKa) (BRKb), Moody’s largest investor, also sold a bunch of MCO shares, totaling about 1 million in three transactions in March.
Whether McDaniel and Berkshire knew about the ‘Wells Notice’ when they sold their stock is still unclear at this point.
Moody’s dropped $1.72, or 7.36%, to $21.64 at 3.38 p.m. in NYSE trading, the lowest since Oct. 8.