Sept. 30 (Bloomberg) -- Credit-rating firms sometimes failed to follow their own ratings processes, make accurate disclosures or manage conflicts of interest, the Securities and Exchange Commission’s staff said in a report on the industry.
The 10 firms registered with the SEC as nationally recognized statistical ratings organizations, or NRSROs, have already begun responding to recommendations in today’s report, the agency’s first under rules imposed by the Dodd-Frank Act. Lawmakers directed the SEC to increase scrutiny of raters after the firms were faulted for helping spark the 2008 credit crisis with inflated grades on securitized debt.
“We expect the credit rating agencies to address the concerns we have raised in a timely and effective way, and we will be monitoring their progress as part of our ongoing annual examinations,” Norm Champ, deputy director of the SEC’s Office of Compliance Inspections and Examinations, said in a statement.
Dodd-Frank, the regulatory overhaul enacted last year, required the SEC to set up an independent office to oversee credit ratings. The formation of that office has been blocked by House Republicans who have criticized the agency’s performance.
--Editor: Gregory Mott
To contact the reporter on this story: Jesse Hamilton in Washington at email@example.com.
To contact the editor responsible for this story: Lawrence Roberts at firstname.lastname@example.org.