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Conflict of interest rules cause headaches at S&P

S&P head office
Photo: Getty Images

SEC charges S&P Global Ratings with violating conflict of interest rules; $2.5m penalty levied.

As with many compliance issues this one started with a series of errors.

In 2017 a client asked S&P Global Ratings (S&P) to rate a residential mortgage-backed security transaction. S&P’s analytical employees responsible for evaluating and assigning ratings provided feedback to the issuer, assigning “AAA” ratings to super senior tranches