“Taking on the little guy, but missing the big ones”

May 14, 2012 by · Leave a Comment
Filed under: SEC 

Jesse Eisinger of ProPublica, in an opinion piece that appeared in the New York Time’s Deal Book, was sharply critical of the Securities and Exchange Commission’s (SEC) suit against the small rating agency, Egan-Jones.

Relative to the Justice Department, Mr. Eisinger believes that the SEC is proud of their action. He likens this to “being proud that you’re the ‘Dumb’ of ‘Dumb and Dumber.’”

The suit, Mr. Eisinger writes, is essentially for filling out forms incorrectly.

“All told, the allegations [against Egan-Jones] seem especially paltry when compared with the disastrous performance of the rating agencies that matter — Moody’s and S&P. Egan-Jones’s ratings didn’t cripple the global economy.”

He continues, “The inescapable conclusion is that the S.E.C. is letting Moody’s and S. & P. officials walk free while pursuing Mr. Egan on minor technicalities.”

“This is your S.E.C., folks. It courageously assails tiny firms, and at the pace of a three-toed sloth.”

In his conclusion, Mr Eisinger speculates that, “Promising leads on other potential wrongdoings by [big three] credit rating agencies seemingly go to the S.E.C. to die.”

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