Join 250,000+
professionals today
Add Insights to your inbox - get the latest
professional news for free.
- Just 1 email every week
- 3-min easy reads
- Uninterrupted updates
Join 250,000+
professionals today
Add Insights to your inbox - get the latest
professional news for free.
SEC Penalizes Six Credit Rating Firms for Recordkeeping Lapses
Join our 250K+ subscribers
Join our 250K+ subscribers
Subscribe06 SEP 2024 / SEC UPDATES
Did you catch the latest SEC shake-up? The Securities and Exchange Commission just took aim at six major credit rating agencies for some serious recordkeeping slip-ups. Yep, even the big dogs like Moody’s Investors Service, S&P Global Ratings, and Fitch Ratings are feeling the heat, shelling out over $49 million in penalties for failing to keep their electronic communications in check.
Here’s the damage report: Moody’s and S&P Global are each hit with a whopping $20 million penalty—ouch! Fitch Ratings isn’t far behind, paying $8 million, while HR Ratings de México has been fined $250,000. A.M. Best Rating Services will pay $1 million, and Demotech, Inc. rounds it off with a $100,000 penalty. Most of these firms are now required to hire compliance consultants to overhaul their recordkeeping procedures, except for A.M. Best and Demotech, who got off slightly easier for their early efforts to comply.
So, what’s the big deal? According to SEC Deputy Director Sanjay Wadhwa, failing to maintain proper records isn’t just a minor oversight—it’s a serious breach that can disrupt the SEC’s ability to keep firms accountable, often leaving investors in the lurch. The message from the SEC is crystal clear: there are benefits to cooperating, but if you fall short, you’re going to feel it in your wallet.
These penalties don’t just come with a fine print; the agencies are also ordered to cease and desist from future violations and will be taking a long, hard look at their internal policies. So, if you’re thinking of cutting corners, take a page from this book—compliance isn’t just about ticking boxes; it’s about keeping your business in the clear and avoiding some very expensive lessons. Learn about more recent updates from the SEC here.
Until next time…
Don’t forget to share this story on LinkedIn, X and Facebook
📢MYCPE ONE Insights has a newsletter on LinkedIn as well! If you want the sharpest analysis of all accounting and finance news without the jargon, Insights is the place to be! Click Here to Join
