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SEC settles with Egan-Jones over gov't ratings

Published on NewsOK Modified: January 22, 2013 at 2:33 pm •  Published: January 22, 2013

Egan Jones and its founder, Sean Egan, agreed to the order without admitting any wrongdoing. The Haverford, Pa., shop is one of 11 firms the SEC recognizes as an official rating organization.

The SEC's order bars the firm from giving official ratings for issuers of government and asset-backed bonds, often pools of mortgages or automotive loans. But the firm is best known for its corporate credit ratings, and the settlement leaves Egan-Jones' ability to offer recognized ratings on corporations intact, Hassiepen said.

"Our bread and butter is unaffected," he said.

In the run-up to the 2008 financial crisis, Egan-Jones became known for railing against the power of the three major rating agencies, Moody's Investors Service, Standard & Poor's and Fitch Ratings.

Last September, Egan-Jones cut its rating on U.S. government debt to AA- from AA, prompted by the Federal Reserve's effort to support the economy. The firm said the Fed's buying of mortgage bonds would hurt the U.S. economy by weakening the dollar and pushing up prices for oil and other commodities.