More trouble for S&P and SEC

Even as the world teeters on the brink of another economic precipice, the fallout from the 2008 financial crisis continues.

The U.S. Justice Department is now said to be investigating the ratings agency’s activity during the housing bubble, and is looking particularly at instances where S&P analysts advocated lowering ratings on some mortgage bonds and other investment projects, but were overruled by higher-ups.

The investigations were underway prior to the S&P decision to downgrade long-term U.S. Treasury debt earlier this month. Investors concerned about a global slump, meanwhile, continue to flock to U.S. debt, pushing yields on Treasury bonds to record lows.

And there’s more.

A former government official, turned whistleblower, has accused the U.S. Securities and Exchange Commission of destroying records of enforcement actions it was investigating but chose not to pursue. According to the former official, the destroyed files pertained to concerns about market manipulation, financial fraud and insider trading at major Wall Street wirehouses.

The SEC inspector general is already pursuing reports the Commission incorrectly handled its investigation into Bernie Madoff’s Ponzi scheme.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.