An awaited report on the conduct and process at key credit rating agencies in the wake of a historic upheaval tied to securities rated by the firms was released late Tuesday by the Securities and Exchange Commission -- and the report was anything but kind to Fitch Ratings, Moody's Investors Service, or Standard & Poor's, the three major credit rating agencies. The SEC said it found ample evidence that the agencies "struggled" with an explosion in subprime mortgages and associated RMBS and CDO issuance volume. "The examinations uncovered that none of the rating agencies examined had specific written comprehensive procedures for rating RMBS and CDOs," the SEC said in a press statement. "Furthermore, significant aspects of the rating process were not always disclosed or even documented by the firms, and conflicts of interest were not always managed appropriately." None of which, of course, should come as a surprise to market participants or key analysts at each of the major rating agencies; numerous soruces told HW that what the SEC found was what many insiders have now known for at least a year -- in the case of a few analysts we spoke to in confidence, even longer than that. "We've uncovered serious shortcomings at these firms, including a lack of disclosure to investors and the public, a lack of policies and procedures to manage the rating process, and insufficient attention to conflicts of interest," said SEC chairman Christopher Cox. "When the firms didn't have enough staff to do the job right, they often cut corners." Interestingly, among the findings in the report is a finding that RMBS and CDO surveillance was "less robust than the processes used for initial ratings." Given that most rating agencies have said they often were forced to rate deals on less-than-complete information, the fact that deal surveillance was (is?) performed with even less information should be disconcerting. For all of what was included in the report, it's what wasn't that caught the ire of many investors: a naming of specific shortcomings and data from specific firms. What little information the report provides refers to each firm by number only (Firm 1, Firm 2 and Firm 3). "What does that teach the market in the way of transparency?" asked Joshua Rosener, an analyst at Graham Fisher & Co., in the Wall Street Journal's coverage of the SEC report. "How does that help the market feel any more comfortable about holding securities they held largely based on ratings? "We want to know which deals are the worst deals, and releasing those documents would go toward that end."