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SEC May Punish S&P For Credit Downgrade

From a joyous Associated Press:

S.E.C. Weighs Action Against Standard & Poor’s

Monday September 26, 2011

The staff of the Securities and Exchange Commission is considering recommending civil legal action against Standard & Poor’s over its rating of a 2007 collateralized debt offering.

Collateralized debt obligations, also known as C.D.O.’s, are securities tied to multiple underlying mortgage loans. The securities generally gain value if borrowers repay. But if borrowers default, investors lose money. Soured C.D.O.’s have been blamed for making the 2008 financial crisis worse. Ratings agencies have been accused of being lax in rating the investment.

The S.E.C. staff said it may recommend that the commission seek civil money penalties, disgorgement of fees or other actions.

You see, only S&P missed the problems that lead to the mortgage crisis. Not Moody’s. Not Fitch. Only S&P will be punished. But they aren’t being singled out for having downgraded Obama’s the US credit rating.

By the way, the SEC missed it, too. Of course they had a good excuse. Their employees were too busy watching pornography. Come to think of it, maybe S&P could try using this as their excuse.

Maybe S&P would get some sympathy from the SEC’s public sector union bureaucrats. Who, you will be stunned to learn, being unionized, were safe from any real disciplinary measures.

S.& P. has been under fire for its recent downgrade of United States long-term debt, as well as several bad calls it made leading to the financial crisis and economic meltdown that began in 2008. The unit’s president stepped down last month.

McGraw-Hill Companies, which owns S.& P., said Monday that it received a so-called Wells notice from the S.E.C. on Thursday. A Wells notice is a warning to a company that the commission is considering enforcement action.

S.& P. said it has been cooperating with the commission and plans to continue cooperating on the matter

This is a very troubling development. This is how tinhorn dictators in third world banana republics operate.

This is not America. Or at least, it didn’t use to be.

This article was posted by Steve Gilbert on Tuesday, September 27th, 2011. Comments are currently closed.

2 Responses to “SEC May Punish S&P For Credit Downgrade”

  1. GetBackJack

    also, found at Instypundit, how Labor dominated politicos think, as in the above article …

    BRITAIN: UK Labour Party wants journalism licenses, will prohibit “journalism” by people who are “struck off” the register of licensed journalists. “The UK Labour party’s conference is underway in Liverpool, and party bigwigs are presenting their proposals for reinvigorating Labour after its crushing defeat in the last election. The stupidest of these proposals to date will be presented today, when Ivan Lewis, the shadow culture secretary, will propose a licensing scheme for journalists through a professional body that will have the power to forbid people who breach its code of conduct from doing journalism in the future.”


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