Happy monopoly describes the ongoing status of the SEC approved rating companies (Nationally Recognized Statistical Rating Organizations – NRSRO). Notwithstanding that the Financial Crisis Investigation Commission and Senator Carl Levin’s Subcommittee on Oversight confronted the CEOs of the big ratings firms whose crisis-related pay went up by a multiple of ten — with the fundamental conflict of being paid by the companies whom they rated and whose businesses require a rating.
The SEC has now chosen to press charges against one of the few firms that actually sell its product. It seems unimaginable that any responsible regulatory process would result in the SEC allocating its resources to the problems caused by the tiny Egan-Jones in lieu of dealing in a forthright way with the continuing “fraud” of the conventional giant firms. How can we hold the SEC responsible for such a preposterous and discriminatory allocation of its regulatory attention?
Out of interest, you may want to see the SEC’s 2011 Summary Report of Commission Staff’s Examination of each Nationally Recognized Statistical Rating Organization.
