The SEC (U.S. Securities and Exchange Commission) has been investigating the sales and marketing of mortgage bond deals by financial firms and lenders. Now, it is expanding the probe to include credit rating agencies. The SEC believes that the agencies, McGraw Hill’s Standard & Poor and Moody’s Investors Service (both owned by Moody’s Corp), may not have done enough research to “rate adequately the pools of subprime mortgages and other loans that underpinned the mortgage bond deals” that ultimately generated enormous losses for investors around the world.
Moody’s has responded, saying that the firm is “uncertain as to what [Wall Street Journal, who questioned them on the issue] is referring, [but] would certainly cooperate with any requests we receive from the SEC.”
Do you think that the credit agencies should face scrutiny as have investors, lenders and financial firms?
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