SEC fines credit-rating agency $6 million

Chris Hamblin

29 October 2015

An SEC investigation that followed an annual examination of DBRS by the agency’s Office of Credit Ratings found that the firm said wrongly that it would monitor on a monthly basis each of its outstanding ratings of U.S. residential mortgage-backed securities and re-securitised real estate mortgage investment conduits by conducting a three-step quantitative analysis and subjecting each rating to review by a surveillance committee. The firm did not do this and its staffing and technological resources to conduct surveillance for these ratings monthly was inadequate.

In the fiscal year that ended in September, the SEC took 807 enforcement actions that covered a wide range of misconduct and obtained orders totalling approximately $4.2 billion in disgorgement and penalties. Of those, a record 507 were so-called 'independent actions' for breaking the federal securities laws and 300 were either actions against issuers who were delinquent in making required 'filings' with the SEC or administrative proceedings seeking bars against individuals because they had criminal convictions, civil injunctions, or other orders.