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SEC Now Probing S&P Over ‘Insider Trading’

From the UK’s Financial Times:

SEC makes S&P downgrade inquiries

By Kara Scannell in New York
August 11, 2011

The Securities and Exchange Commission has asked credit rating agency Standard & Poor’s to disclose who within its ranks knew of its decision to downgrade US debt before it was announced last week, as part of a preliminary look into potential insider trading, people familiar with the matter say.

The inquiry was made by the SEC’s examination staff, which has oversight of credit rating firms, one person familiar with the matter said. The exam staff can make referrals to the SEC’s enforcement division if it believes any laws have been violated, but the inquiry might not result in a referral.

This person said they were looking at who had the information as a starting point. The person added that the agency is not aware of a leak from an S&P insider, nor was it aware of an aberrational trade.

Proving someone leaked information about the downgrade, or traded ahead of it, could be challenging.

Many traders anticipated the downgrade and bets could occur across numerous securities or currencies without inside information. In a traditional insider trading case, there is often a more predictable correlation between a company’s stock price and a particular development

None of that matters. The point is to smear S&P and put the fear of the Messiah into them.

In fact we all know that S&P’s real crime was not insider trading. It was a crime of lèse-majesté. By downgrading the US government’s credit rating S&P violated Mr. Obama’ majesty. They struck at the king.

The [SEC] first gained the ability to inspect credit rating agencies in 2007. Those powers grew following the passage of the Dodd-Frank law last year

Which is why these agencies have toed the Democrat line, until now.

And now S&P must be made an example of, one way or another.

This article was posted by Steve on Friday, August 12th, 2011. Comments are currently closed.

4 Responses to “SEC Now Probing S&P Over ‘Insider Trading’”

  1. GetBackJack says:

    We’re wasting our time trying to get through to the brain damaged Left. What follows is from a Left-leaning relative, sent to me by email.

    ” …. Could this be TRUE??? An interesting factoid via my brilliant lawyer brother Henry: “Standard and Poor’s is owned by McGraw-Hil l. Harold McGraw III, the current CEO, worked for H.W. Bush, Dole, W. Bush, Cheney, Giuliani and is currently working for Romney 2012. So the person who wants to downgrade the nation’s credit works for Mitt Romney.” As Bill Walton tweeted: “This is easier than a Scooby Doo Mystery.”

    With a brain that makes linkage into causation, that sees the bar-sinister in the mere association of names, which can make leaps of this magnitude with a mathematical certainty, I see no hope whatsoever of being able to cohabit a sane world with this sort of mind.

    Don’t know what we’re going to do, but the above is representative of the diabolical disorientation Sister Lucia spoke of.

  2. Petronius says:

    A perfect example of shooting the messenger.

    It has been obvious for a long time to everyone in the financial community and in the investment community that the United States government is the biggest debtor nation in history and is in dire financial straits indeed.

    These conditions have long been priced into the markets, as reflected by the historic decline in the value of the US dollar and the bull market in gold and Swiss francs.

    In fact, the US debt should have been downgraded some time ago. http://www.youtube.com/watch?v=9CI1pEPQyiw

    These conditions have been obvious to the Chinese, who curtailed their purchases of US Treasury securities almost one year ago.

    It has certainly been obvious to Bill Gross and the bond managers at PIMCO, who unloaded their last holdings of US Treasuries many months ago.

    And it has been painfully obvious even to those ignorant, stupid, violent, racist, hostage-taking, guns-to-the-head, terrorist Tea Party hobbits since at least mid-2009.

    So, in other words, S&P merely pointed out the obvious, which had already been priced into the markets.

    S&P’s rationale for the downgrade was that the negotiated budget agreement fell short of what is needed to stabilize rising US debt levels. That was obvious.

    S&P also criticized the contentious nature of the political process surrounding the raising of the debt ceiling, which reduced confidence in the willingness and ability of American leaders to address the rising US deficits. That, too, was obvious.

    S&P concluded that this disadvantage offset America’s other unique advantages, such as the US dollar as the world’s reserve currency. Again, obvious.

    Finally, S&P compared the US to certain other AAA countries –– Canada, the UK, France, and Germany. It found that those countries are reducing their debt burdens, whereas US public debt is trending higher. Ditto.

    It is a sad comment on our times when people and institutions are persecuted for speaking truth to power.

    How much better –– and safer –– it would be for all of us to admire the emperor’s new clothes and keep our true opinions to ourselves.

    • Rusty Shackleford says:

      It is tantamount to a group of minorities picketing a bank because they couldn’t get home loans, because they mostly had criminal records, made minimum wage and their credit ratings were in the double digits. However, as a side-note, the mortgage crime, whereby such people were given home loans, and the obvious result took hold worked out so very well?

      As you said, S&P was simply forced to state the obvious but just as the above example points out and as Steve has to clearly stated, they have now sinned against the king and must be punished. But again, at the end of the day, the downgrade will stand, Obama owns it and there’s nothing he and his festering boils-on-the-ass-of-America can do about it. Like it or lump it; The truth stings, don’t it?

      Like my dad used to tell me, “Sooner or later, you’re going to have to face the truth and the longer that takes, the more it’s gonna hurt and the worse it’s gonna get. So you can do it now, or you can wait until it becomes a train wreck; it’s up to you.”

      They waited (Collectively. Not just Obama but the entire decades of government can-kickers)and now the obvious result has ensued. The fact that it’s this administration, in general, is perhaps the perfect example of runaway spending and the over-zealousness of the socialists in office right now and the “system” pushing back. Although it appears to be easy to turn this nation into a euro-socialist oligarchy, they are now running into the mechanics of why that’s not so easy.

      Additionally, like Steve also pointed out, and as I and many thinking people predicted, Obama is really showing his ass about how much he wishes he was a dictator and how the American process is necessarily sticky, cumbersome, tedious and lengthy. The founding fathers were no dummies. They knew how people think and act when given power. But the current batch of self-centered droolers were all complicit when they decided that a group of twelve, rather than the entire congress, shall decide matters of spending. I’m hoping that will be investigated and found unconstitutional and removed from their bag of tricks, and will force them to go back to square one and start over.

      As one concerned citizen, I’m not liking what they’re doing and I would personally remove 90% of all sitting members of congress for illegal activity.

      On that, I stand with Mark Twain, “Suppose for a moment I was a congressman. And then suppose that I was an idiot. But I repeat myself.”

  3. proreason says:

    Their lives will be a living hell.

    In other words, S&P exectives are going to get a dose of what the country has experienced since November 2008.

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