The Canadian Press - ONLINE EDITION

S&P says regulators considering action against it over mortgage securities ratings in 2011

  • Print

WASHINGTON - Standard & Poor's said Wednesday that regulators have told the rating agency they are considering taking civil enforcement action against it over ratings it gave to six deals in 2011 involving securities tied to commercial mortgages.

S&P's parent McGraw Hill Financial Inc. disclosed in a regulatory filing that it has received a so-called "Wells Notice" from staff of the Securities and Exchange Commission. The notice indicates the staff will recommend to the five-member commission that it pursue action against S&P for alleged violations of securities laws.

Under SEC procedure, S&P will be able to make its case to the agency on the issues raised by the notice.

S&P has been co-operating with the SEC in the matter and will continue to do so, New York-based McGraw Hill said.

SEC spokeswoman Gina Talamona declined to comment.

The three big agencies — S&P, Moody's and Fitch — have been blamed for helping fuel the 2008 financial crisis by giving high ratings to risky mortgage securities. Those investments later soured when the housing market went bust. High ratings from the agencies made it possible for banks to sell trillions in risky investments. Some investors, including pension funds, can only buy securities that carry high credit ratings.

In a separate case, the Justice Department filed civil charges against S&P in February 2013, accusing it of failing to warn investors that the housing market was collapsing in 2006 because it would be bad for business. S&P knowingly inflated its ratings of risky mortgage investments, the Justice Department said. It's seeking $5 billion in penalties against the company.

S&P has denied the allegations, saying its ratings were based on a good-faith assessment of the performance of home mortgages during a time of market turmoil. S&P has said the government filed the lawsuit against it as "retaliation" for its downgrade of the U.S. credit rating in 2011.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Exclusive architectural tour of CMHR with Antoine Predock

View more like this

Photo Store Gallery

  • Marc Gallant / Winnipeg Free Press. Local- Weather standup. Sundog. Refraction of light through ice crystals which caused both the sun dog and and fog along McPhillips Road early Wednesday morning. 071205.
  • A female Mallard duck leads a group of duckings on a morning swim through the reflections in the Assiniboine River at The Forks Monday.     (WAYNE GLOWACKI/WINNIPEG FREE PRESS) Winnipeg Free Press  June 18 2012

View More Gallery Photos

Poll

Do you think the Scottish independence referendum will have an effect in Canada?

View Results

View Related Story

Ads by Google