S&P may face civil action
WASHINGTON — Standard & Poor’s said Wednesday that regulators have told the rating agency they are considering taking civil enforcement action against it over ratings it gave to six deals in 2011 involving securities tied to commercial mortgages.
S&P’s parent McGraw Hill Financial Inc. disclosed in a regulatory filing that it received a so-called “Wells Notice” from the Securities and Exchange Commission. The notice indicates the staff will recommend to the five-member commission that it pursue action against S&P for alleged securities violations.
The three big agencies — S&P, Moody’s and Fitch — have been blamed for helping fuel the 2008 financial crisis by giving high ratings to risky mortgage securities. Those investments later soured when the housing market went bust.