|
| SEC Found Shortcomings with Credit Rating Firms WASHINGTON -- Regulators found shortcomings in how credit rating agencies evaluated structured products such as mortgage-backed securities, the Securities and Exchange Commission (SEC) Chairman Christopher Cox said on Monday according to Reuters. The rating agencies, which are paid by the issuers whose securities they rate, have come under criticism for failing to act quickly enough to warn investors about the risks of investing in complex “structured” securities, the Financial Times reported. Ratings analysts are often managed by the same people who run the business side of such firms. For months the SEC has been scrutinizing credit rating agencies' internal records and e-mail relating to their ratings of mortgage-backed securities and collaterized debt obligations, Reuters reported. The findings of the SEC probe, expected to be made public this week, according to the Financial Times, follow months of examinations that sought to determine whether the rating agencies diverged from their usual procedures to publish higher ratings for complex financial products tied to mortgages as the sector began to boom. -- NYSSCPA.org News Staff Posted on 7/8/08 |
Print