UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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UNITED STATES OF AMERICA : Criminal No.
v. : Filed
XXXXX'X INVESTORS SERVICE, INC., : Violation: 18 U.S.C. ss. 1505
Defendant :
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PLEA AGREEMENT
The United States and the defendant, Xxxxx'x Investors Service, Inc.
("Moody's"), hereby enter into the following Plea Agreement pursuant to Rule
11(e)(1)(B) of the Federal Rules of Criminal Procedure.
1. Moody's will waive indictment pursuant to Rule 7(b) of the Federal
Rules of Criminal Procedure and will plead guilty to a one-count information, in
the form attached, charging it with a violation of 18 U.S.C. ss. 1505 in
connection with the willful obstruction of compliance with a Civil Investigative
Demand issued to, and received by, Moody's on March 6, 1996 by the Antitrust
Division of the United States Department of Justice by the destruction of
responsive documents. The plea will be entered in the United States District
Court for the Southern District of New York.
2. Moody's understands and agrees that sentencing for the crime charged
in the attached information will be in accordance with the United Sentencing
Commission Guidelines Manual (Nov. 2000) ("U.S.S.G.").
3. Moody's understands and agrees that pursuant to 18 U.S.C. ss. 1505
and 18 U.S.C. ss. 3571 and U.S.S.G. ss. 8C2.10, the maximum fine which may be
imposed against it upon conviction for a violation of 18 U.S.C. ss. 1505 is a
fine of not more than $500,000.
4. In addition, Moody's understands that:
(a) pursuant to 18 U.S.C. xx.xx. 3551, 3561 and U.S.S.G. ss. 8D1.2, the
Court may impose on it a term of probation of between one and five years;
(b) pursuant to ss. 3013(a)(2)(A) and U.S.S.G. ss. 8E1.1, the Court is
required to impose a special assessment of $200.
5. The United States and Moody's agree to recommend jointly to the
Court that the appropriate disposition of the charge against Moody's in the
attached information is the imposition of a fine of $195,000. The fine shall be
payable within fifteen days of the date of imposition of sentence.
6. The United States and Moody's agree that the recommended fine level
reflects Moody's recognition and affirmative acceptance of responsibility for
its criminal conduct. Moody's demonstrated such acceptance of responsibility
when it reported its conduct to the United States in April, 1998. The fine level
further reflects Moody's cooperation with the investigation of this conduct by
the United States.
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7. Moody's agrees that it will not file any motion to reduce, modify or
alter the fine imposed upon it by the Court so long as said fine does not exceed
$195,000 and that it will in no event seek to reduce the fine to less than
$195,000.
8. Moody's and the United States agree to recommend against the
imposition of probation on the defendant pursuant to 18 U.S.C. xx.xx. 3551, 3561
and U.S.S.G. ss. 8D1.1 and agree further that none of the factors set forth in
18 U.S.C. xx.xx. 3553, 3562 and U.S.S.G. ss. 8D1.1 require the Court to impose a
term of probation.
9. Moody's and the United States have agreed that the period of
limitations for any possible violations with respect to the conduct set out in
the attached Information shall be tolled and extended pending the disposition of
this Plea Agreement. They have entered into a separate written agreement which
excludes from any calculation of the statute of limitations the period beginning
April 20, 2001 and continuing through the date of imposition of sentence
pursuant to this Agreement.
10. Upon acceptance of the guilty plea called for by this Plea
Agreement, the United States agrees that it will not bring criminal charges
under 18 U.S.C. xx.xx. 4, 371, 1001, 1503, 1505, 1512, 1621, or 1622 against any
current or former director, officer, or employee of Moody's or its current or
former corporate parent or subsidiaries for any act or offense committed prior
to the date of this Plea Agreement and while such person was employed by Moody's
or its current or former corporate parent or subsidiaries that involved any
actual or attempted obstruction of compliance with the CID issued March 6, 1996
by the Antitrust Division or that otherwise relates to Moody's response to the
CID ("Relevant Offense").
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11. Upon acceptance of the guilty plea called for by this Plea
Agreement, the United States agrees that it will not bring any further criminal
charges against Moody's or its current or former corporate parent or
subsidiaries for any Relevant Offense committed prior to the date of this Plea
Agreement.
12. This Agreement, and specifically paragraphs 10 and 11, does not
provide any protection against prosecution for any crimes except as set forth
above. It does not apply to any civil liability to the United States, to any
violation of the federal tax or securities laws, or to any crime of violence.
13. The United States reserves the right to make any statements to the
Court or the Probation Department concerning the nature of the offense charged
in the attached Information, Moody's cooperation and acceptance of
responsibility, and any other facts or circumstances that it deems relevant, to
comment on or correct any representation made by or on behalf of Moody's and to
supply any other information to the Court that it may require.
14. Moody's understands that the Court has absolute discretion,
pursuant to Rule 11 of the Federal Rules of Criminal Procedure, to accept or
reject the recommendations of this Plea Agreement. Moody's understands that
should the Court reject these recommendations, (a) it cannot withdraw its guilty
plea once it has been entered, and (b) the Court has absolute discretion to
impose any sentence permitted by law.
15. This Plea Agreement constitutes the entire agreement between the
United States and Moody's concerning the disposition of the criminal charges in
this
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case. This Plea Agreement cannot be modified except in writing signed by the
United States and Moody's.
16. The undersigned, Xxxx X. Xxxxxxx, Esq., Senior Vice President and
the General Counsel of Xxxxx'x, is authorized to enter this Plea Agreement on
behalf of Moody's, as evidenced by the Resolution of the Board of Directors of
Moody's, attached hereto, and incorporated herein by reference.
Dated: April 10, 2001
/s/ Xxxx X. Xxxxxxx /s/ Xxxxxxxxxx Xxxxxxxxx
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XXXX X. XXXXXXX XXXXXXXXXX XXXXXXXXX
Senior Vice President/General Counsel
Xxxxx'x Investors Service, Inc. /s/ Xxxxxxx X. XxXxxxx
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XXXXXXX X. XxXXXXX
/s/ Xxxxxx X. Xxxxxxx, Esq. /s/ Xxxxxx Xxxxxxxxx
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XXXXXX X. XXXXXXX, ESQ. XXXXXX XXXXXXXXX
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx /s/ Xxxxx X. Xxxx
New York, New York ----------------------------
Counsel for Xxxxx'x Investors Service, Inc. XXXXX X. XXXX
Attorneys
Antitrust Division
U.S. Department of Justice
00 Xxxxxxx Xxxxx, Xxxx 0000
(Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxxxxxx Xxxxx, Esq. (000) 000-0000
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XXXXXXXX XXXXX, ESQ.
Squadron, Xxxxxxxx, Xxxxxxx
& Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Counsel for Xxxxx'x Investors Service, Inc.
