SEC enforcement chief: ‘looking very closely’ at credit rating agencies’ role in meltdown

SEC targets rating agencies’ role in meltdown

WASHINGTON — The Securities and Exchange Commission’s enforcement chief says his staff is targeting Wall Street rating agencies and their role in the financial meltdown.

The three dominant agencies — Moody’s Investors Service, Standard & Poor’s and Fitch Ratings — have been widely criticized for failing to give investors adequate warning of the risks in subprime mortgage securities, whose collapse touched off the financial crisis.

SEC Enforcement Director Robert Khuzami told a Senate hearing that his staff is “looking very closely at credit rating agencies” and is “focused on that area.”

Khuzami says a 2007 law empowers the SEC to bring enforcement actions against rating agencies based on false statements they may have made.