{"id":81862,"date":"2022-06-22T02:07:52","date_gmt":"2022-06-22T06:07:52","guid":{"rendered":"https:\/\/www.hedgeco.net\/news\/?p=81862"},"modified":"2022-06-22T02:07:40","modified_gmt":"2022-06-22T06:07:40","slug":"sec-charges-egan-jones-ratings-co-and-ceo-with-conflict-of-interest-violations","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/06\/2022\/sec-charges-egan-jones-ratings-co-and-ceo-with-conflict-of-interest-violations.html","title":{"rendered":"SEC Charges Egan-Jones Ratings Co. and CEO with Conflict of Interest Violations"},"content":{"rendered":"\n<p>(HedgeCo.Net) The Securities and Exchange Commission today charged Haverford, PA-based <strong>Egan-Jones Ratings Company,<\/strong> a nationally recognized statistical rating organization (NRSRO) registered with the Commission in certain ratings classes, with violating conflict of interest provisions. The SEC also charged the company\u2019s founder and chief executive officer, Sean Egan, with causing certain of those violations.<\/p>\n\n\n\n<p>The SEC\u2019s order finds that, in 2019, Egan, who at the time headed Egan-Jones\u2019s ratings group, became involved in business and marketing activities concerning a client and was influenced by sales and marketing considerations while participating in determining a credit rating for that client, which created a prohibited conflict of interest.&nbsp;The order finds that by issuing and maintaining a rating for the client under those circumstances, Egan-Jones violated the SEC\u2019s NRSRO conflict of interest rules and, further, that Egan caused the company\u2019s violations.&nbsp;<\/p>\n\n\n\n<p>The SEC\u2019s order also finds that, in 2018, Egan-Jones violated another conflict of interest provision by continuing to issue and maintain ratings for another client even though that client had contributed ten percent or more of the company\u2019s net revenues during the prior fiscal year. Finally, the order finds that Egan-Jones failed to establish, maintain, and enforce policies and procedures reasonably designed to manage such conflicts of interest.&nbsp;<\/p>\n\n\n\n<p>&#8220;Credit rating agencies play a vital role in assessing the credit risk of an issuer and must be vigilant in avoiding potential conflicts of interest to promote the integrity, impartiality, and quality of credit ratings,&#8221; said Gurbir S. Grewal, Director of the SEC\u2019s Division of Enforcement. &#8220;As the SEC\u2019s order finds, both Egan-Jones and Sean Egan violated the securities laws related to credit rating agency conflicts of interest and now are being held accountable for their actions.&#8221;<\/p>\n\n\n\n<p>Without admitting or denying the SEC\u2019s findings, Egan-Jones agreed to settle the matter by paying a $1.7 million penalty and more than $146,000 in disgorgement and interest. It also committed to conduct training, retain an independent consultant to assess its policies and procedures concerning conflicts of interest, and prohibit Egan from, among other things, participating in determining or monitoring credit ratings issued or maintained by Egan-Jones or developing or approving procedures used for determining credit ratings issued or maintained by Egan-Jones.&nbsp; Separately, and also without admitting or denying the SEC\u2019s findings, Egan agreed to pay a $300,000 penalty to settle the SEC\u2019s charges against him.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(HedgeCo.Net) The Securities and Exchange Commission today charged Haverford, PA-based Egan-Jones Ratings Company, a nationally recognized statistical rating organization (NRSRO) registered with the Commission in certain ratings classes, with violating conflict of interest provisions. The SEC also charged the company\u2019s [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048,16047],"tags":[],"class_list":["post-81862","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news","category-insider-trading-2"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/81862","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=81862"}],"version-history":[{"count":1,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/81862\/revisions"}],"predecessor-version":[{"id":81863,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/81862\/revisions\/81863"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=81862"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=81862"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=81862"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}