SEC Fines 2 Credit Rating Agencies $10 Million for Failing to Retain Work Texts
September 29 2023 - 10:33AM
Dow Jones News
By Dean Seal
The U.S. Securities and Exchange Commission has fined two
credit-rating agencies a combined $10 million for allegedly failing
to preserve employees' work-related text messages.
The regulator on Friday said Morningstar subsidiary DBRS and the
Kroll Bond Rating Agency have each admitted to its findings that
they failed to retain text messages exchanged internally about
making or adjusting credit ratings.
DBRS's violations started in at least July 2019 and included
employees at senior levels, the SEC said. The texts that weren't
properly preserved related to initiating and determining credit
ratings, as well as adjustments to results of the predictive model
that the firm used to rate certain transactions.
The Kroll firm's violations started in at least January 2020 and
involved text messages about initiating, monitoring, changing and
withdrawing credit ratings.
DBRS has agreed to pay $6 million and Kroll is set to pay $4
million to resolve the separate actions against them.
In a separate action, the SEC is also accusing DBRS of making
systematic adjustments to its credit enhancement levels in ways
that didn't line up with the company's published procedures.
Without admitting or denying those findings, DBRS has agreed to
resolve the matter with another $2 million penalty.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
September 29, 2023 10:18 ET (14:18 GMT)
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