SEC Wants S&P Out of Mortgage Bond Ratings Business

Standard & Poors (S&P), a company deeply involved in rating mortgage derivatives at the center of the 2008 credit crisis, might be no longer rating mortgage bonds if the U.S. Securities and Exchange Commission (SEC) has its way.

SEC's case against Standard & Poors

The SEC case against S&P, which is described in a Bloomberg report by Matt Robinson and Dave Michaels as being the toughest action against a major credit rating agency to date, centers on a 2011 case where S&P is charged with bending their rating criteria to win business. In investment ratings, the company selling the investment often selects and pays the company rating the product, a point considered a built in conflict of interest...