In a court filing today, the rating agency Standard & Poor’s (S&P) claims that the federal case against them is motivated by retaliation for its 2011 decision to strip the United States of its “AAA” credit rating.
It might be easy to dismiss this claim, but they aren’t the only ones in this situation. Before S&P’s U.S. downgrade, the smaller firm Egan-Jones, which relies on a subscriber model also downgraded the United States. Not long after, Egan-Jones was investigated by the SEC and ultimately barred for a time from rating U.S. debt. Let’s remember that Egan-Jones was ahead of the curve in spotting both the subprime bubble and the failures of WorldCom and Enron.
Read more at http://www.cato.org/blog/sps-dilemma-rating-regulator
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