SEC: S&P lied about mortgage bond ratings
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"A third SEC order issued in this case involved internal controls failures in S&P’s surveillance of residential mortgage-backed securities ratings. The order finds that S&P allowed breakdowns in the way it conducted ratings surveillance of previously-rated RMBS from October 2012 to June 2014.
S&P changed an important assumption in a way that made S&P’s ratings less conservative, and was inconsistent with the specific assumptions set forth in S&P’s published criteria describing its ratings methodology.
S&P did not follow its internal policies for making changes to its surveillance criteria and instead applied ad hoc workarounds that were not fully disclosed to investors."
"In the conduit space, S&P only rated 5.6% of the market in 2014, and all of these bonds were also rated by either Fitch or Moody’s. With the small market share, the new issue market is likely to be unaffected by the loss of S&P in 2015."