As you'll recall, back in 2011 S&P abruptly pulled ratings from a new issue deal citing "discrepancies in how its methodology was being applied". Then they were radio silent for a year before meekly announcing that the discrepancy was insignificant and they were back to rating deals.
Bloomberg has an article out today that "three people with knowledge of the matter" said that the SEC is investigating how S&P rated a certain CMBS in 2011. I think we can all guess which one that was.
This latest inquiry is separate from the 2/4/2013 suit brought by Justice Department against S&P, which is focused primarily on resi deals from 2004 - 2007.
**Update** For whatever reason two robo-users have chosen this one post to spam with unwanted content in the comments section. It waste a ton of my time deleting them everyday so I'm closing the comments on this one post and reporting the two users. It goes against my general rule of allowing any comments to come in, and not making any changes to posts - even if I make an error I'll leave it, or at least acknowledge it, and then include an updated statement. However, I'm not going to let a robot take over the comments section either. What an arsehole.
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5 comments:
What a coincidence that S&P was the first agency to downgrade the US...
So the SEC caused S&P's rating screw up on that 2011 deal because S&P had downgraded the US? Since that would be ridiculous, i'd say it probably is a coincidence.
Was Fabrice Tourre responsible for the credit crisis? No, he was doing exactly what his better-remunerated bosses were telling him to do. The SEC said the right thing to do was to single him out, to show what? That they were pursuing the crooks? Same here. Moodys and even moreso Fitch were just as responsible as S&P, so why is it just S&P getting prosecuted? Their 2011 screwup has nothing to do with it.
The injustice done to Tourre to placate the ignorant mob's continuing quest for a single person to blame has as much to do with this recent investigation as S&P's downgrade of the US did; none. There's no connection between the two events other than the participants.
There is certainly a separate discussion on what kind of crack the SEC is smoking these days with these bogus arguments about crisis era matters, and why judges allow it continue. But their review of the pulled rating is much closer to what they should be doing as regulators - timely supervision of companies to ensure participants have confidence in the markets.
It's not illegal to be stupid, nor should it be. Granted, S&P pulled their rating which created all sorts of problems for GS, but where is there a transgression of the law? I think this is a witchhunt.
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