“Egan-Jones plans to contest potential charges expected from the U.S. Securities and Exchange Commission today that the credit rating agency made material and intentional misstatements in its application to the SEC to rate securities in 2008.
Specifically, the SEC may vote on whether to charge Egan-Jones with misleading the market regulator over its rating experience, its finances, its internal procedures, as well as the adequacy of its books and records.
The SEC also may charge Egan-Jones over its conflict of interest policy. Egan-Jones gets paid by investors, whereas the larger credit-rating agencies get paid by Wall Street companies who issue securities. The SEC is not contesting the actual ratings offered by Egan-Jones.
An earlier SEC inspector general report noted the market regulator had misgivings about Egan- Jones’ application to be a credit rating agency. Reuters broke the news earlier that the SEC could vote possibly later today on whether or not to charge Egan-Jones, citing people familiar with the matter.
A person close to the matter says Egan-Jones denies any wrongdoing and will fight any charges. The SEC declined comment…”
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