Egan-Jones temporarily barred from rating assets
Credit ratings firm Egan-Jones Rating Company and its president Sean Egan agreed to an 18-month ban from rating asset-backed and government securities issuers as a Nationally Recognized Statistical Rating Organization, the Securities and Exchange Commission said on Tuesday.
The company also agreed to correct any deficiencies and submit a report explaining how it would correct its missteps.
"Accuracy and transparency in the registration process are essential to the commission's oversight of credit rating agencies," said Robert Khuzami, director of the SEC’s Division of Enforcement.
He added, "EJR and Egan’s misrepresentation of the firm’s actual experience rating issuers of asset-backed and government securities is a serious violation that undercuts the integrity of the SEC’s NRSRO registration process."
The SEC accused Egan-Jones last year of exaggerating its record in its application to the government in July 2008. The firm said it had performed 150 ratings of asset-backed securities and 50 ratings of governments. In actuality, the company had no such ratings at the time.
Egan-Jones consented to the entry of the order without admitting or denying the findings. The order requires the firm to cease and desist from committing or causing future violations.