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Egan-Jones Rating Agency Barred by the SEC for 18 Months

Independent credit-rating agency Egan-Jones is barred by the SEC for 18 months from issuing ratings (as an NRSRO) on governments and ABS.  The firm was charged with saying on its SEC registration statement it had been issuing ratings since 1995, when it had not.

Its president Sean Egan criticized the major rating agencies for blatant misconduct leading up to and during the financial crisis (see recent commentary).  His main criticism focused on the conflict of interest caused by the issuer pays business model.  Now with Egan Jones out of the running the issuer pays business model lives on!

Source:  SEC Press Release and Seeking Alpha

 

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