Friday, September 7, 2007
The SEC and several state regulators (including New York and Ohio) are investigating the performance of the rating agencies and its effect on the subprime mortgage market. The agencies have been criticized because of their slowness in downgrading their ratings of subprime debt. Regulators are looking into the conflicts of interest, since the agencies assist in the marketing of the debt by assigning ratings that enable them to be sold. WSJ, Ratings Firms' Practices Get Rated.