An issue over the rating of a collateralized debt obligation from 2007 prompted the SEC Thursday to send a so-called Wells Notice to McGraw-Hill, the parent company of Standard and Poor’s.
According to the notice, the SEC is considering recommending civil legal action against the Standard and Poor’s debt ratings agency over Delphinus CDO 2007-1.
“The McGraw-Hill Companies, Inc. today filed a Form 8-K with the U.S. Securities and Exchange Commission acknowledging that on September 22, 2011, it received a ‘Wells [n]otice’ from the commission staff stating that the staff is considering recommending that the commission institute a civil injunctive action against Standard & Poor’s Ratings Services, 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,’” The company said in a statement. “In connection with the contemplated action, the staff may recommend that the commission seek civil money penalties, disgorgement of fees and other appropriate equitable relief.”