The US financial regulator has dropped possible fraud charges against rating agency Moodys over a computer glitch.
The Securities and Exchange Commission SEC was investigating top-raking AAA ratings given by the agency in error to complex debt products in 2007.
Moodys said that a bug in its computer simulation model meant that it thought the "constant proportion CDO" products were much safer than they really were.
The regulator said it was uncertain it had authority to pursue the case.
The SEC blamed "uncertainty regarding a jurisdictional nexus between the United States and the relevant ratings conduct."
The relevant transactions and rating decisions were carried out in Europe and were marketed to European investors.
The SEC claims that Moodys failed to correct the ratings for a year after it first discovered the coding error.
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