NEWS ARTICLE SUMMARY Essay Example | Topics and Well Written Essays - 500 words

NEWS ARTICLE SUMMARY - Essay Example Standard & Poors is an important financial company in the United States that provides services within the credit and stock industries. The issue between the SEC and Standard & Poors stems from the fact that the latter company may have violated â€Å"federal securities laws related to its ratings of collateralized debt obligations in 2007, as the financial crisis was getting under way†(Rizzo). Standard & Poors is a company that often provides a service to the country by raising and lowering credit ratings of companies and countries. When it raises or lowers the rating, it is essentially providing a report card for how well that company/country is doing in their business and their business practices. The SEC believes that Standard & Poors basically did not do their job in monitoring companies like Sallie Mae and Freddie Mac which were significant contributors to the housing/ mortgage crisis that ultimately led the United States into this severe recession in the first place. According to Patrick Rizzo, â€Å"Some critics have said it(Standard & Poors) and other ratings agencies helped contribute to the crisis by not warning about the dangers of sub-prime mortgages(Rizzo). So, by publicly considering legal or civil action against Standard & Poors, the SEC is making a statement about this company and casting a negative light upon their practices. It is important to think about what the SEC’s motive might be however in doing this. Last month, Standard & Poors lowered the United States credit rating from AAA to AA+(Swann). This was done in August 2011 and was said to be done due to the conflict going on in the United States government over raising the debt ceiling. The lowering of the credit rating was seen as a big deal and an overall comment on how the United States was doing in handling their economic woes. Therefore, it does not seem inconceivable that the SEC, which is a part of the