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RATING AGENCIES FACE FURTHER PAIN WITH LANDMARK WALL STREET REFORM BILL

The Senate passed the landmark ‘Wall Street reform bill’ which includes important new requirements and oversight of rating agencies.  The most damaging aspect of the reform bill for rating agencies is the liability provision.  Investors could bring private rights of action against rating agencies for a knowing or reckless failure to conduct a reasonable investigation of the facts or to ... Read More »

NEW COMPETITION LURKING IN THE WINGS FOR CREDIT RATING

Notwithstanding the imminent ‘thumb of government’ a number of companies have indicated their interest in entering the credit rating business:  Morningstar (see page 15), Bloomberg, Coface, Kroll, Hearst and not to be left out KPMG and PwC.  What makes them think they will do better?     BIIA Newsletter June I – 2010 Issue Read More »

MOODY’S SERVED WITH A WELLS NOTICE BY SEC

Moody’s Corp. said late that it received a Wells notice from the Securities and Exchange Commission alleging that it had made “false and misleading” statements submitted as part of an application to register as a nationally recognized statistical rating organization in 2008.  The Wells notice, which is an official notification from the SEC that a company is being investigated, relates ... Read More »

SEC STRENGTHENS OVERSIGHT OF CREDIT RATING AGENCIE

The U.S. Securities and Exchange Commission (SEC) recently voted unanimously to issue several rules aimed at more harshly regulating U.S. credit rating agencies. Specifically, the proposals will bolster oversight of Nationally Recognized Statistical Rating Organizations (NRSROs) by enhancing disclosure and improving the quality of issued credit ratings.   “These proposals are needed because investors often consider ratings when evaluating whether to ... Read More »