(Reuters) - The parent of Moody's Investors Service was ordered to defend against a lawsuit by a former analyst who claimed it retaliated improperly against him after he called into question its credit ratings for debt securities that later proved toxic.
U.S. District Judge Paul Crotty in Manhattan said the whistleblower analyst Ilya Eric Kolchinsky may pursue his claim that Moody's Corp
Kolchinsky said the suspension effectively ended his employment, and was in retaliation for his alleged failure to cooperate with a "so-called independent investigation" by an outside law firm that he called an effort to "white-wash" the company's alleged fraud.
Crotty dismissed several other claims by Kolchinsky, including defamation and intentional infliction of emotional distress.
Michael Adler, a Moody's spokesman, had no immediate comment, having yet to review the opinion. Kolchinsky and his lawyer Diana Carlino did not immediately respond to requests for comment.
Kolchinsky is a former managing director of the derivatives group at Moody's Investors Service, and oversaw ratings for asset-backed securities collateralized debt obligations.
Following his suspension, Kolchinsky testified before the U.S. House Committee on Oversight and Government Reform, during its investigation of credit rating agencies, about how the New York-based company managed conflicts of interest.
Kolchinsky had alleged that prior to and following his testimony, Moody's had "embarked on a carefully planned media campaign" to discredit him, causing him to be blackballed by other employers.
The case is Kolchinsky v. Moody's Corp et al, U.S. District Court, Southern District of New York, No. 10-06840.
(Reporting By Jonathan Stempel; Additional reporting by Grant McCool; Editing by Gary Hill and Matthew Lewis)
