Quantcast
Connect with us

SEC mulls charges against McGraw Hill in CDO case

Published

on

(Reuters) – McGraw-Hill Cos Inc said U.S. regulators may charge its Standard & Poor’s ratings unit with violating federal securities laws with ratings on a repackaged mortgage bond in 2007.

The company said it received a Wells Notice from the U.S. Securities and Exchange Commission that commission staff may recommend a civil lawsuit against the unit for a rating on 2007 collateralized debt offering (CDO) known as “Delphinus CDO 2007-1.” The staff may recommend that the SEC seek monetary penalties, the company said in a statement today.

ADVERTISEMENT

Regulators send Wells Notices to companies or people to give them a chance to argue why government should not file an enforcement action against them.

The company said it received the notice on September 22.

The SEC’s investigation comes as McGraw-Hill prepares to split into two publicly-traded companies, one holding Standard & Poor’s and market information services and another holding its textbook publishing company.

Institutional shareholders, led by Jana Partners, have pushed the company to completely separate the S&P ratings business from the information services.

ADVERTISEMENT

S&P issued the CDO rating in question at the end of the credit boom that carried mortgage lending and house prices to unsustainable heights. S&P put triple-A credit ratings on many mortgage-related securities which later went into default when house prices collapsed.

S&P’s failures with structured finance ratings were recently cited by Washington politicians as reason to doubt the agency’s downgrade of U.S. government debt in August from triple-A.

(Reporting by David Henry in New York, Aditi Sharma in Bangalore; Editing by Sayantani Ghosh and Derek Caney)

ADVERTISEMENT

Enjoy this piece?

… then let us make a small request. Like you, we here at Raw Story believe in the power of progressive journalism — and we’re investing in investigative reporting as other publications give it the ax. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and legal efforts to harm workers exploited by abusive bosses. We’ve launched a weekly podcast, “We’ve Got Issues,” focused on issues, not tweets. And unlike other news outlets, we’ve decided to make our original content free. But we need your support to do what we do.

Raw Story is independent. You won’t find mainstream media bias here. We’re not part of a conglomerate, or a project of venture capital bros. From unflinching coverage of racism, to revealing efforts to erode our rights, Raw Story will continue to expose hypocrisy and harm. Unhinged from billionaires and corporate overlords, we fight to ensure no one is forgotten.

We need your support to keep producing quality journalism and deepen our investigative reporting. Every reader contribution, whatever the amount, makes a tremendous difference. Invest with us in the future. Make a one-time contribution to Raw Story Investigates, or click here to become a subscriber. Thank you. Click to donate by check.

Enjoy this piece?

… then let us make a small request. Like you, we here at Raw Story believe in the power of progressive journalism — and we’re investing in investigative reporting as other publications give it the ax. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and efforts to harm workers exploited by abusive bosses. We’ve launched a weekly podcast, “We’ve Got Issues,” focused on issues, not tweets. Unlike other news sites, we’ve decided to make our original content free. But we need your support to do what we do.

Raw Story is independent. You won’t find mainstream media bias here. We’re not part of a conglomerate, or a project of venture capital bros. From unflinching coverage of racism, to revealing efforts to erode our rights, Raw Story will continue to expose hypocrisy and harm. Unhinged from corporate overlords, we fight to ensure no one is forgotten.

We need your support to keep producing quality journalism and deepen our investigative reporting. Every reader contribution, whatever the amount, makes a tremendous difference. Invest with us in the future. Make a one-time contribution to Raw Story Investigates, or click here to become a subscriber. Thank you.



Report typos and corrections to: [email protected]. Send news tips to: [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

Breaking Banner

Texas governor busted sending racist call-to-arms a day before El Paso attack: ‘take matters into our own hands’

Published

on

On Thursday, Gov. Greg Abbott (R-TX) tweeted out a message of unity and promised to work to reduce violence in his state, in the wake of the shooting in El Paso that left 22 dead and dozens more injured:

Today we had hearings responding to the tragic shooting in El Paso.

We focused on community healing, combating domestic terrorism, reducing hateful ideologies, & keeping guns out of hands of deranged killers while respecting 2nd Amendment rights.

We’ll keep TX safe.#txlege pic.twitter.com/ymct4aiSgK

Continue Reading

Breaking Banner

Facebook bans far-right website from pro-Trump advertising after they try to skirt transparency rules

Published

on

On Thursday, NBC News reported that Facebook has banned the Epoch Times from placing political advertisements, after the right-wing website tried to conceal its multimillion-dollar dark money streams and get around the social network's political advertising transparency rules in its propaganda supporting President Donald Trump.

The Epoch Times had tried to skirt rules by running ads under puppet names like "Honest Paper" and "Pure American Journalism," confusing users about who was really behind the ads.

Continue Reading
 

Breaking Banner

GOP leaders are pressuring Kansas Republican to resign from Congress immediately: report

Published

on

On Thursday, the Topeka Capital-Journal reported that Republicans in Kansas and Washington are pressuring Rep. Steve Watkins (R-KS) to step down after just eight months in office.

It is currently unclear why they are calling for his resignation.

Watkins has thus far given no indications he will leave office. His spokesman Jim Joice stated that he has no plans to resign, and disputed the idea that Republican officials are pressuring him to do so, but acknowledged there have been conversations around the topic.

Continue Reading
 
 

Thank you for whitelisting Raw Story!

As a special thank you, from now until August 31st, we're offering you a discounted rate of $5.99/month to subscribe and get ad-free access. We're honored to have you as a reader. Thank you. :) —Elias, Membership Coordinator
LEARN MORE
close-link
close-image