UPDATE 2-Moody's, under fire, replaces COO Clarkson

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By Dena Aubin and Jonathan Stempel

NEW YORK, May 7 (Reuters) - Moody's Corp (MCO.N: Quote, Profile, Research) said on Wednesday that Brian Clarkson will retire as president and chief operating officer of Moody's Investors Service, which is under fire for assigning high credit ratings to mortgage and other securities whose value later collapsed.

Clarkson, 52, will remain with the company through the end of July. He will be replaced as COO by Michel Madelain, also 52, who has been Moody's executive vice president of global fundamental ratings.

Raymond McDaniel, chief executive of Moody's Corp, will become president of the rating agency, the New York-based company said.

Moody's announced the departure of Clarkson fewer than nine months after Standard & Poor's, a unit of McGraw-Hill Cos (MHP.N: Quote, Profile, Research) and Moody's main rival, replaced Kathleen Corbet as president, installing Deven Sharma.

Like S&P, Moody's has been criticized for assigning high ratings to complex securities, including debt comprised of subprime mortgages, only to rapidly downgrade such securities as credit markets tightened and the housing slump deepened.

"It's an indicator of a major change at Moody's, and a major retrenchment from structured finance," said Joseph Mason, an associate professor of finance at Drexel University in Philadelphia, who has studied the industry.

"Clarkson was a driving force at Moody's for structured finance," he added. "I think this is a de facto admission that Moody's cannot accurately rate asset-backed securities, especially subprime mortgages."