Washington, D.C. (AP) - Federal regulators are warning credit rating
agencies that they could face civil fraud charges for giving
inaccurate ratings to investments.
The Securities and Exchange Commission issued the warning
Tuesday in a report on its investigation into a possible violation
of the law by Moody's Investors Service, one of the three big
rating agencies. The SEC said it will not pursue Moody's for civil
fraud because of uncertainty over jurisdiction.
The financial overhaul law enacted in July calls for reducing
the influence of Moody's, Standard & Poor's and Fitch Ratings. They
were discredited in the financial crisis for giving high ratings to
risky mortgage securities.
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