The Financial Times is reporting that the Securities and Exchange Commission has asked Standard & Poor’s to disclose “who within its ranks knew of its decision to downgrade U.S. debt before it was announced last week.” Citing people familiar with the matter, the paper says the request is part of a preliminary investigation into potential insider trading.
SEC spokesman Kevin Callahan declined to comment when reached by AdvisorOne.
“The inquiry was made by the SEC’s examination staff, which has oversight of credit rating firms,” according to the Times. “The exam staff can make referrals to the SEC’s enforcement division if it believes any laws have been violated, but the inquiry might not result in a referral.”
This paper says they were looking at who had the information as a starting point. The paper added that “the agency is not aware of a leak from an S&P insider, nor was it aware of an aberrational trade.”