The Securities and Exchange Commission declined to comment on a report in The Wall Street Journal alleging the regulator could file civil fraud charges against credit rating agencies for their role in fueling the credit crisis. According to the WSJ article, any charges filed would be directed at ratings giants Standard & Poor’s and Moody’s (MCO). The SEC and S&P declined to comment on the report, while Michael Adler, a spokesman for Moody’s Corp., said “although Moody’s is uncertain as to what the The Wall Street Journal story refers, we would cooperate with any request we receive from the SEC.” Adler declined to comment further when asked if the agency has received a request for information from the federal regulator. Any charges contemplated against the rating agencies would revolve around the firms’ treatment of mortgage-bond deals that played a key role in sparking the prolonged credit crisis, according to the report. The WSJ article added that other firms under investigation include JP Morgan (JPM), Citigroup (C), Morgan Stanley (MS), Bank of America’s Merrill (BAC) segment and UBS AG. Rumors of pending civil charges against the rating agencies arrive months after a Senate Subcommittee report blamed “inaccurate triple-A credit ratings” from S&P and Moody’s for bringing significant risks into the financial system. At the time of the report’s release, S&P said while it was disappointed in some of its ratings on certain mortgage securities, “the actions we took to downgrade U.S. RMBS and CDOs in 2007 and 2008 reflected the unprecedented deterioration in credit quality, but were not a cause of it.” Write to: Kerri Panchuk.
SEC mum on possible civil charges against ratings giants
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