INDIANAPOLIS, Ind. (WOWO/AP): Secretary of State Connie Lawson has announced a $12.77 million settlement for Indiana, involving 20 other states, the District of Columbia, and the U.S. Department of Justice. The deal came after Moody’s Corp. agreed to pay nearly $864 million to settle federal and state claims it mislead investors and gave inflated ratings to risky mortgage investments in the years leading up to and through the 2008 financial crisis.

The settlement calls for $437.5 million to go to the Justice Department and $426.3 million to be divided among the states and the District of Columbia.

Moody’s — along with the other two major rating agencies, Standard & Poor’s and Fitch — were widely criticized for giving low-risk ratings to the risky mortgage securities being sold ahead of the crisis, while they reaped lucrative fees.

In the settlement, the world’s second-largest credit ratings agency acknowledged that it didn’t follow its own standards in rating the risk of securities backed by home mortgages and the collateralized debt obligations that relied on their health.

“I am pleased that Moody’s has been brought to account for its misleading ratings through the enforcement of Indiana’s securities law,” Secretary Lawson said. “Our investors expect and deserve accuracy and integrity from companies like Moody’s, and I am proud of our efforts, made in cooperation with the Attorney General’s office, that allowed justice to be served.”

In addition to the monetary settlement, Moody’s entities have agreed to significant compliance terms to ensure they conduct their ratings activities independently and objectively – including an annual certification by the CEO of Moody’s Corporation, which will be provided to Indiana every year for the next four years, certifying that Moody’s is following certain compliance requirements.