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http://www.nytimes.com/2010/05/11/business/11moodys.html?src=busln
The S.E.C. appears to be continuing their efforts in exposing the major players responsible for the financial crisis. Recently there has been a lot of negative attention regarding Goldman Sachs however it seems agencies like Moody's and Standard & Poor's have gone untouched despite their shady involvement in rating risky M.B.S.'s and C.D.O's. How do you feel about the S.E.C. finally taking action against these companies? Will this information hurt the rating agencies more than a company such as Goldman?
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I think that this action alone won't affect the rating companies much, but the fact that the article states that there have been dozens of private lawsuits is promising. With this the ratings companies are bound to get more attention from the media and the public, and with this more oversight from the government which might not help with what happened in the past but can definitely help for the future.
ReplyDeleteThese companies entire business is their reputation. Challenging that could destroy them. I'm not sure that's a good thing though. I think the service they provide is important as long as it is done well. Hopefully these suits will not destroy the companies but just reform them.
ReplyDeleteI think that though it may hurt their reputation a little I think they will recover it eventually after it is all said and done as long as they show change from their previous practices. They won't get hurt as bad as Goldman will if they are found to have committed fraud.
ReplyDeleteI agree with Jared although the financial crisis may have hurt thier reputation, but hopefully they will recover and provide better practices in the future. Our book explained how these agencies were pretty much controlled by the big banks so it will be interesting to see what measures are taken and whether these problems can be worked out for the future.
ReplyDeleteI think it's absolutely right to go after these rating companies. Seems like the SEC is going to target all major institutions that played a role in the crisis. Why choose Goldman first? Maybe they figure that if they have any sort of victory with Goldman, lessor companies will settle quickly in fear.
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