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SEC examination finds failures at 10 rating agencies


WASHINGTON—A report issued Friday by the U.S. Securities and Exchange Commission found that problems remain at 10 rating agencies it examined despite the agencies' efforts to improve their operations.

The “2011 Summary Report of Commission Staff's Examination of Each Nationally Recognized Statistical Rating Organization” did not name any of the 10 organizations—which included Standard & Poor's Corp., Moody's Investors Service Inc., Fitch Ratings Ltd. and A.M. Best Co.—as having performed poorly in a particular area.

Instead, the review “generally found instances where each of the NRSROs failed to follow all its ratings procedures.” It said the instances generally involved failing to follow procedures regarding documentation to be maintained with respect to each ratings action, adding that “none of these instances appears to have been material.”

It also found that some rating agencies failed to manage potential conflicts of interest adequately and to make timely and accurate disclosures.

“We expect the rating agencies to address the concerns we have raised in a timely and effective way, and we will be monitoring their progress as part of our ongoing annual examinations,” said Norm Champ, deputy director of the SEC’s office of compliance inspections and examinations, in a statement announcing the report’s release.

The report is available at