The SEC is coming after the Egan-Jones Ratings Co, guns blazing. Surely it just happens to be a coincidence that the SEC has filed suit (for missing a comma in a filing) against the only ratings firm that is funded by investors rather than Wall Street banks, and also happens to be the firm that has downgraded US debt to AA?
The Securities and Exchange Commission, it seems, has finally lost its mind.
From Bloomberg:
In April, motivated by what I consider pure maliciousness, the SEC initiated a “cease and desist” administrative proceeding it deemed “necessary for the protection of investors and in the public interest” against Egan-Jones Ratings Co., a privately owned, 20-person firm based in Haverford, Pennsylvania, and against its principal owner, Sean Egan…
See what happens when you attempt to inform the public of the US’ true fiscal status?
Now, incredibly, Egan-Jones is the sole rater that the SEC has decided to attack. The trouble for the firm started on July 16, 2011, when Egan-Jones downgraded the U.S.’s sovereign debt by one notch, to AA+ from AAA. Egan-Jones cited “the relatively high level of debt and the difficulty in significantly cutting spending.” Two days later, the SEC’s Office of Compliance Inspections and Examinations contacted the firm seeking information about its rating decision. (The next month, S&P also downgraded the U.S.’s sovereign debt, but neither Moody’s nor Fitch did.)
Then, on Oct. 12, Egan-Jones received a call from the SEC notifying the firm of a Wells Notice, an indication that it was being investigated. On April 5 of this year, Egan-Jones again downgraded the U.S. sovereign debt, to AA from AA+. On April 19, leaks started emanating from the SEC that it had voted to start an “administrative law proceeding” against the firm. And on April 24, the SEC filed its complaint.
Just what does the SEC object to so vehemently about Egan- Jones? The commission claims that on its 2008 supplemental application to be a “nationally recognized” ratings firm, Egan- Jones “falsely stated” that it had already rated the credit of 150 asset-backed securities and of 50 sovereign-debt issues. The SEC claims Egan-Jones “willfully made these misstatements and omissions to conceal the fact that it had no experience issuing ratings on ABS or government issuers.” The SEC intends to fine Egan-Jones and to possibly censure Sean Egan.
Message to the ratings firms- play the game by our rules or face massive fines and personal harassment.
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The anticipation is killing me…..did they lie or is the SEC making it up? If they did lie, that is very bad for Egan-Jones,
If the SEC is trumping it all up, that’s bad for all of us!
If Moodys and S&P are willing to lie about the subprime fiasco where they labeled junk as AAA, they have to look over their shoulders 24/7 to make sure the gun toting goon squad does not haul them off in irons The major rating services are now defacto arms of the US treasury and Fed. Keeping them on a tight leash so that when ratings are laid out, the government gets a first look. Call it the governmental equivalent of PRIMA NOCTA.
So Uncle Sam gets to pass on every rating today, even the purported downgrade of the USA which IMO should be no better than BBB And giving Europe down grades left and right is meaningless since a blind pig could rate europe.
Egan Jones, like Weiss, is a reality check and a solid rating downgrade is what is called for.
That the SEC, a bunch of self serving wankers whose days are spent using one hand for typing and one hand for other things as they search the web for the best porn sites, couldn’t find their a**es with sonar is a given. This suit is a feint that is supposed to scare Egan Jones. In my opinion the follow up from EJ would be MOLON LABE with a bullet.
if your going to poke a dog in the eye … your gonna get bit
More attempts by the controllers to keep the mighty fiat dollar from imploding. Guess what guys we already know the US dollar is toilet paper!
I think that we should also invest in US dollars so that we can have some toilet paper very cheaply. The one dollar bills are going to be very cheap to use and the 100 dollars bills are going to be used a lot since they are the most common denomination in US dollar circulation.
You can rest assure this action benefits the cartel. It doesn’t matter who is lying anymore. Lying is only OK if it benefits the cartel. They just make sure the liars are judged by the cartel’s judges. That ought to be fair, huh?