22 January 2015
The US Securities and Exchange Commission (SEC) has charged US ratings agency Standard and Poor’s (S&P) for fraud.
Standard & Poor’s Ratings Services has been charged with a series of federal securities law violations, because of fraudulent misconduct in its ratings of certain commercial mortgage-backed securities (CMBS).
S&P has agreed to pay a fine of more than $58 million (£38.2 million) to settle the SEC’s charges. It has also paid an addition fine of $19 million to settle parallel cases lodged, by the New York Attorney General’s Office of $12 million (£7.9 million) and the Massachusetts Attorney General’ Office of $7 million (£4.6 million).
Andrew J. Ceresney, Director of the SEC Enforcement Division said: ‘Investors rely on credit rating agencies like Standard & Poor’s to play it straight when rating complex securities like CMBS.
‘But Standard & Poor’s elevated its own financial interests above investors by loosening its rating criteria to obtain business and then obscuring these changes from investors. These enforcement actions, our first-ever against a major ratings firm, reflect our commitment to aggressively policing the integrity and transparency of the credit ratings process.’