The Securities and Exchange Commission has expanded its probe into the deals that contributed to the financial crisis to include major credit-rating firms and is considering civil fraud charges against those companies, the Wall Street Journal reports.
Leading rating companies have already been criticized by lawmakers as “key enablers” of the financial crisis for their role in fueling the mortgage-securities bubble.
SEC officials are now investigating whether the ratings companies committed fraud by neglecting to do enough research to “rate adequately the pools of subprime mortgages and other loans that underpinned the mortgage-bond deals,” the Journal reports. Standard & Poor’s and Moody’s Investors Service are among the firms drawing SEC scrutiny, though the inquiry may not lead to charges against any of the firms.
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