"WASHINGTON (Reuters) - Examiners at the Securities and Exchange Commission are checking to ensure that Standard & Poor's followed all of its policies leading up to its downgrade of long-term U.S. debt, according to people familiar with the matter. Compliance, Inspections and Examinations is part of its new authority under the Dodd-Frank Wall Street overhaul law. Among other things, the law gives the SEC the power to continuously monitor credit-rating agencies and conduct annual inspections at each firm. A SEC spokesman declined comment on the review. McGraw-Hill's Standard and Poor's has faced tough criticism from lawmakers, market players and the U.S. Treasury Department since it announced its decision to downgrade the long-term U.S. debt from a AAA to a AA-plus earlier this month. S&P cut the long-term U.S. credit rating by one notch on concern about the government's budget deficit and rising debt burden. The Obama administration accused S&P of making an error in its calculations leading to the unprecedented downgrade. S&P has vigorously denied it made any mistakes. S&P spokesman Ed Sweeney had no comment on the SEC review." http://finance.yahoo.com/news/SEC-reviewing-SP-handling-on-rb-3413736841.html?x=0
To paraphrase Al from Deadwood, S&P has earned themselves one long-term ass-fucking courtesy the US gov't. Buffett may be able to save his beloved Moody's, but the ratings game is forever changed. S&P is surely going to be busted into little pieces as a result of this.
SEC has a little fry-pan, can't handle big case like Madoff, only after Madoff walking in and surrender to it. SEC is a joke, can't handle the truth, only wants its power on small fish.
Needless to say the SEC will not investigate Moodys and Fitch for misleading people into believing that U.S. government finances are sound.
This SEC investigation is just political grandstanding by the Obama admin, period. You'd have to be a fool not to think the admin is pressuring Moodys and Fitch not folllow S&P's footsteps by pushing this investigation.
Are they wrong in doing so? I think S&P is the biggest fool of all. Their credibility was shot during the credit crisis, but this really sent them over the edge. They admitted to a 2 trillion dollar mistake in their calculation, and they just went against the USA when any bad news has a great effect on the markets. Govt is going to make it as tough as possible for them to do anything. Old saying holds true, you dont bite the hand that feeds you.
S&P is merely stating the obvious, mainly that the emperor has no clothes. Quite amusing they would enlist the SEC's assistance in trying to silence S&P from pointing out this simple fact.
They made much more damage when they DIDN'T state the obvious on all the CDOs and real estate investments that they gave AAA ratings to only to have them bankrupt days later. I dont know how they are allowed to do business. They are as intelligent as the anchors on CNBC.
Did they really know that the CDOs were bunk? I don't think the rating agencies have inside knowledge especially with something that complex and convoluted.