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Standard & Poor's (S&P)


Self Description

September 2006: 'Standard & Poor's plays a truly unique role in the capital markets. It has been aiding the creation of market transparency since its inception in 1860, when Henry Varnum Poor began supplying financial information at a time when Europe sought to know more about its holdings in the newly developing infrastructure in America. The cardinal tenet of Poor's investment reference publications was "the investor's right to know.".... Standard & Poor's has a long history of creating standards for the financial industry....

Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. With approximately 7,500 employees, including wholly owned affiliates, located in 21 countries, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions."

http://www2.standardandpoors.com/servlet/Satellite?pagename=sp/Page/AboutUsMainPg&r=1&l=EN&b=8&s=1

Third-Party Descriptions

February 2013: "The Justice Department filed civil fraud charges late on Monday against the nation's largest credit-ratings agency, Standard & Poor's, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck."

http://dealbook.nytimes.com/2013/02/04/u-s-and-states-prepare-to-sue-s-p-over-mortgage-ratings

May 2010: "For S.& P., Moody’s and Fitch, this is a war on two fronts. And while fought in vastly different realms — in courts and in Washington — the fights have this in common: either could wind up costing the rating agencies vast sums of money."

http://www.nytimes.com/2010/05/23/business/23rating.html

May 2010: "The New York attorney general has started an investigation of eight banks to determine whether they provided misleading information to rating agencies in order to inflate the grades of certain mortgage securities...The companies that rated the mortgage deals are Standard & Poor’s, Fitch Ratings and Moody’s Investors Service."

http://www.nytimes.com/2010/05/13/business/13street.html

April 2010: 'Chris Atkins, a spokesman for Standard & Poor’s, noted that the agency was not named in the S.E.C.’s complaint. “S.& P. has a long tradition of analytical excellence and integrity,” Mr. Atkins said. “We have also learned some important lessons from the recent crisis and have made a number of significant enhancements to increase the transparency, governance and quality of our ratings.”'

http://www.nytimes.com/2010/04/24/business/24rating.html

September 2009: "Moody's, Standard & Poor's, and Fitch Ratings all maintained at least A ratings on AIG and Lehman Brothers up until mid-September of last year. Lehman Brothers declared bankruptcy Sept. 15; the federal government provided AIG with its first of four multibillion-dollar bailouts the next day."

http://www.huffingtonpost.com/2009/09/30/credit-rating-agency-anal_n_305587.html

November 2008: 'Lewis continued: Eisman knew that subprime lenders could be disreputable. “What he underestimated was the total unabashed complicity of the upper class of American capitalism... ‘We always asked the same question,’ says Eisman. ‘Where are the rating agencies in all of this? And I’d always get the same reaction. It was a smirk.’ He called Standard & Poor’s and asked what would happen to default rates if real estate prices fell. The man at S.& P. couldn’t say; its model for home prices had no ability to accept a negative number. ‘They were just assuming home prices would keep going up,’ Eisman says.”'

http://www.nytimes.com/2008/11/26/opinion/26friedman.html

February 2005: Shelby said he was concerned that only a few rating companies control the industry. In 1975, the SEC created a national designation for credit raters: Nationally Recognized Statistical Rating Organizations, or NRSROs. The SEC initially recognized the big three raters -- Moody's Investors Service, Standard & Poor's and Fitch Ratings. Investors have come to consider the designation the U.S. government's stamp of approval. Mutual funds and other institutions use the ratings as a main criterion for investing, selecting only bonds with high-quality ratings. In 2003, the SEC added a fourth, Dominion Bond Rating Service Ltd., a small Canadian firm. There is no formal industry oversight, nor is there a process for credit raters to seek the national designation.

http://www.washingtonpost.com/wp-dyn/articles/A6212-2005Feb7.html

November 2004: In March 2003, Moody's downgraded Hannover's financial strength rating by two notches and lowered its debt by three notches to junk status, sparking a 10 percent drop in the insurer's stock. S&P and A.M. Best, both of which were privy to the German insurer's confidential data, continued to give Hannover a high rating.

http://www.washingtonpost.com/wp-dyn/articles/A8032-2004Nov23.html

November 2001: Among those who do not come out of this looking very good are the bond rating agencies. Just six weeks ago, after Enron put out an earnings release showing strong pro-forma profits, as it defined them, two of the agencies, Fitch and Standard Fitch and Standard & Poor Poor's, reaffirmed Enron's rating of triple-B plus. Moody's, the agency that was the most skeptical about Enron, put the rating under review and hinted it would, at worst, cut it one notch.

http://www.nytimes.com/2001/11/29/business/29PLAC.html

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Owned by (partial or full, past or present) McGraw-Hill Companies Organization Feb 8, 2005

Articles and Resources

23 Articles and Resources. Go to:  [Next 3]

Date Fairness.com Resource Read it at:
Dec 07, 2013 Playing Pension Games (Fair Game)

QUOTE: Securities laws require issuers of municipal debt to provide the information investors need to make informed decisions when buying or selling these instruments. But lax disclosure practices remain, making it hard to spot signs of problems...

New York Times
Feb 04, 2013 U.S. Accuses S. & P. of Fraud in Suit on Loan Bundles

QUOTE: The Justice Department filed civil fraud charges late on Monday against the nation's largest credit-ratings agency, Standard & Poor's, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck....From September 2004 through October 2007, S.&P. "knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors" in certain mortgage-related securities, according to the suit filed against the agency and its parent company, McGraw-Hill Companies. S.&P. also falsely represented that its ratings "were objective, independent, uninfluenced by any conflicts of interest," the suit said.

New York Times
May 21, 2010 Suddenly, the Rating Agencies Don’t Look Untouchable

QUOTE: several major lawsuits against the rating agencies have survived the pretrial phase and might — emphasis on might — end with huge jury verdicts or expensive settlements. In addition, a newly emboldened Congress is on the verge of overhauling financial regulation and could rewrite the rules of the industry. For S.& P., Moody’s and Fitch,...

New York Times
May 12, 2010 Prosecutors Ask if 8 Banks Duped Rating Agencies

QUOTE: The New York attorney general has started an investigation of eight banks to determine whether they provided misleading information to rating agencies in order to inflate the grades of certain mortgage securities, according to two people with knowledge of the investigation.

New York Times
Apr 23, 2010 Rating Agency Data Aided Wall Street in Mortgage Deals

QUOTE: One of the mysteries of the financial crisis is how mortgage investments that turned out to be so bad earned credit ratings that made them look so good. One answer is that Wall Street was given access to the formulas behind those magic ratings — and hired away some of the very people who had devised them.

New York Times
Sep 30, 2009 Credit Rating Agency Analysts Covering AIG, Lehman Brothers Never Disciplined

QUOTE: Analysts at the three biggest credit rating agencies who gave positive, investment-grade ratings to AIG and Lehman Brothers up until their collapse have not been fired or disciplined...

Huffington Post
Sep 05, 2009 New Exotic Investments Emerging on Wall Street

QUOTE: some are dismayed by Wall Street’s quick return to its old ways, chasing profits with complicated new product

New York Times
Nov 26, 2008 All Fall Down

QUOTE: exposed — using Citigroup as Exhibit A — some of our country’s best-paid bankers were overrated dopes who had no idea what they were selling, or greedy cynics who did know and turned a blind eye. But it wasn’t only the bankers. This financial meltdown involved a broad national breakdown in personal responsibility, government regulation and financial ethics.

New York Times
Nov 14, 2008 What Happens When Your Insurer Goes Under? (Your Money)

QUOTE: If you’re looking to switch insurance companies, start with a top-rated one, but also keep an eye out for too-good-to-be-true terms or brand new riders or features. They may not be truly battle-tested. Also, don’t stop paying premiums on your old policy until the new one is up and running.

New York Times
May 22, 2008 More Questions Are Raised About Moody’s Ratings

QUOTE: The attorney general of Connecticut, Richard Blumenthal, who has criticized the practices of Moody’s and other ratings firms, said that he was investigating how Moody’s had dealt with the possible errors in its computer models. “One of the areas that most concerns us is the potential favoritism and abusive and illegal practices that involve dealings with the companies that they rate,” Mr. Blumenthal said in an interview.

New York Times
Jul 13, 2007 Will it be harder to get credit? The problems of subprime loans hint at broader risks in financial markets

QUOTE: The rise of "derivative" securities – complex investments derived from other assets such as mortgage loans – means that even insiders can't quantify the risks or say where they lie.

Christian Science Monitor
May 07, 2007 Roads to Riches: Why investors are clamoring to take over America's highways, bridges, and airports—and why the public should be nervous

QUOTE: There are some advantages to private control of roads, utilities, lotteries, parking garages, water systems, airports, and other properties .... But are investors getting an even better deal? .... The aggressive toll hikes embedded in deals all but guarantee pain for lower-income citizens—and enormous profits for the buyers.

BusinessWeek
Mar 08, 2007 The Trade-Offs for Free E-Trades: Deals from online brokers can include high minimums, limits, and hefty fees for busy players

QUOTE: Bank of America (BAC ), Wells Fargo (WFC ), and upstart broker Zecco.com have each started hawking $0 trades to lure online brokerage customers ...But don't be blinded by these deals du jour. The free-trade offers come with trade-offs.

BusinessWeek
Jul 08, 2006 Piggybacking Onto Trouble

QUOTE: Wall Street is sounding the alarm on one of the most popular ways to buy a house in many high-cost areas around the country -- "piggyback" programs that mesh first-lien mortgages and second-lien credit lines or mortgages that close simultaneously.

Washington Post
Jun 23, 2005 Everything you need to know about auto insurance

QUOTE: Chances are mama never sat you down for that little talk -- the one about liability, collision, comprehensive and deductibles.

Bankrate.com
Feb 08, 2005 Senate Panel to Begin Hearing on Bond Raters

QUOTE: The heads of the big three credit-rating companies and their critics will face off today in a Senate Banking Committee hearing, setting the stage for a regulatory battle over an industry that has eluded controls despite mounting concerns about conflicts of interest, aggressive business practices and a lack of competition and transparency.

Washington Post
Nov 24, 2004 Gatekeepers: Flexing Business Muscle: Credit Raters' Power Leads to Abuses, Some Borrowers Say

QUOTE: Moody's began evaluating Hannover anyway, giving it weaker marks over successive years and publishing the results while seeking Hannover's business....even as other credit raters continued to give Hannover a clean bill of health, Moody's cut Hannover's debt to junk status.

Washington Post
Jul 07, 2002 Credit Firm Gave Moran Favorable Loan

QUOTE: Four days after his MBNA home loan was final, Moran raised his profile in the bankruptcy debate, becoming lead Democratic co-sponsor of an even broader bill.

Washington Post
Jun 29, 2002 Tweaking Numbers to Meet Goals Comes Back to Haunt Executives

QUOTE: ...the slope from earnings management to earnings manipulation to fraud is a slippery one, and during the boom the incentives to cheat became ever more compelling.

New York Times
Jun 26, 2002 WorldCom Says It Hid Expenses, Inflating Cash Flow $3.8 Billion

QUOTE: [Worldcom] ...overstated its cash flow by more than $3.8 billion during the last five quarters in what appears to be one of the largest cases of false corporate bookkeeping yet.

New York Times

23 Articles and Resources. Go to:  [Next 3]