14 aug 2011
SEC probes S&P’s downgrade of US credit ratings
The Securities and Exchange Commission has asked credit ratings agency Standard & Poor’s (S&P) to disclose names of people within its ranks who knew of its decision to downgrade US debt before it was announced last week, says a media report.
The regulator’s move is a part of a preliminary examination into potential insider trading. Citing people familiar with the matter, a newspaper said the SEC has asked S&P to disclose who within its ranks knew of the decision to downgrade US debt before it was announced last week.
The inquiry was made by SEC’s examination staff, which has oversight of the credit rating firms, the report noted. The exam staff can make referrals to the SEC’s enforcement division if it believes any laws have been violated, but the inquiry might not result in a referral, it added.
The report, however, said SEC is not aware of a leak from S&P insider, nor was it aware of an aberrational trade. The SEC’s probe comes even as the Senate banking committee said it is looking at S&P’s decision to downgrade the US credit rating.
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