UPDATE 2-US senator urges SEC to act fast on Moody's probe

(Adds closing share price, Buffett comment last paragraph)

By John Poirier

WASHINGTON, May 22 (Reuters) - The U.S. Securities and Exchange Commission should move swiftly to get to the bottom of a reported coding error at Moody's Investors Service (MCO.N: Quote, Profile, Research, Stock Buzz) that may have led to incorrect ratings of some complex European debt products, a senior Democrat told Reuters on Thursday.

"I think they should act quickly," Sen. Charles Schumer of New York said in an interview. "The revelations about Moody's have been really troubling."

"I don't want to give them (SEC) a timeframe, but they have to move fast because when there's no confidence in the fairness of the credit rating agency, it hurts the entire economy," added Schumer, who is co-chairman of Congress' Joint Economic Committee.

Shares of Moody's, which is already under fire over its role in the U.S. subrime mortgage crisis, closed 6.5 percent lower at $34.51 on Thursday on the New York Stock Exchange, after losing about 16 percent the previous day.

The Financial Times business newspaper reported on Wednesday that Moody's wrongly assigned triple-A ratings to complex European debt products called constant proportion debt obligations, or CPDOs.

Moody's said it rated 44 European CPDO tranches totaling about $4 billion. It said it also hired a law firm to conduct an external investigation into why the coding error in a computer model caused the products to be given a rating four notches higher than they merited.

The revelations prompted calls from U.S. lawmakers to explain the reported error and urged the SEC -- the industry's regulator -- to investigate what went wrong.