Six major credit rating agencies, including Moody’s and S&P Global, will pay $49 million in SEC penalties for significant recordkeeping failures.
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In total, $49 million in penalties will be paid from a settlement with the SEC. Six nationally recognized credit rating agencies are charged with “significant recordkeeping failures”. The firms have admitted that they failed to maintain and preserve electronic communications and have violated recordkeeping provisions of the federal securities laws. The companies include; Moody’s Investors Service Inc., S&P Global Ratings, Fitch Ratings, Inc., HR Ratings de Mexico, A.M. Best Rating Services, and Demotech, Inc. All but one of these agencies will also have to retain a compliance consultant to ensure these mistakes are not made again in the future.
“We have seen repeatedly that failures to maintain and preserve required records can hinder the staff’s ability to ensure that firms are complying with their obligations and the Commission's ability to hold accountable those that fall short of those obligations, often at the expense of the investors,” said Sanjay Wadhwa, Deputy Director of the SEC’s Division of Enforcement. Each of the six firms was charged with violating Section 17(a)(1) of the Securities Exchange Act of 1934 and Rule 17g-2(b)(7) thereunder
