S&P Gets Wells Notice About CDO Rating

The McGraw-Hill Companies, Inc., the parent company for Standard & Poor's, issued a press release stating that on September 22, 2011, it received a "Wells Notice" stating that the SEC staff is considering recommending that the Commission institute a civil injunctive action against S&P, alleging violations of federal securities laws with respect to S&P's ratings for a particular 2007 offering of collateralized debt obligations, known as "Delphinus CDO 2007-1." If the SEC does determine to bring an action, it will be the first against a rating company based on a faulty rating. ProPublica has the background on the Delphinus CDO; see In a First, SEC Warns Rating Agency It May Bring Financial Crisis Lawsuit.