SEC to ban Standard & Poor’s from rating CMBS

The Securities and Exchange Commission is reportedly banning Standard & Poor’s Ratings Services from rating CMBS for an entire year as part of an SEC probe and subsequent $60m settlement with the ratings agency. The SEC’s investigation looked at whether S&P bent its criteria to win business on six CMBS deals issued in 2011, according […]

The Securities and Exchange Commission is reportedly banning Standard & Poor’s Ratings Services from rating CMBS for an entire year as part of an SEC probe and subsequent $60m settlement with the ratings agency.

Screenshot 2015-01-20 at 5.48.04 PMThe SEC’s investigation looked at whether S&P bent its criteria to win business on six CMBS deals issued in 2011, according to Bloomberg.

The alleged violations relate to the CMBS rankings and “public disclosure made by S&P regarding those ratings thereafter,” and S&P is also facing a penalty to settle probes of the same ratings by the Attorney Generals in New York and Massachusetts.

The suspension is separate from a lawsuit by the Justice Department tied to subprime home loans that S&P rated before the credit crisis, which the ratings agency is expected to settle for about $1bn.

The Bloomberg report stated that the official announcement regarding the suspension could come as early as tomorrow.

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