8-KOther Events

S&P Global Inc. 8-K Report, Corporate Update (Sep 26, 2011)

Filed September 26, 2011For Securities:SPGI

Summary

This 8-K filing from S&P Global Inc. (then part of The McGraw-Hill Companies, Inc.) on September 26, 2011, discloses a significant development regarding an ongoing SEC investigation. The company received a Wells Notice from the SEC Staff, indicating that the Staff is considering recommending a civil injunctive action against Standard & Poor's Ratings Services. The alleged violations pertain to S&P's ratings for a specific 2007 offering of collateralized debt obligations (CDOs) known as "Delphinus CDO 2007-1". The Wells Notice is a preliminary step and not a formal finding of wrongdoing. It provides S&P an opportunity to present its case to the SEC Staff before a final decision is made on whether to pursue enforcement action. The potential remedies that the SEC Staff may recommend include civil money penalties, disgorgement of fees, and other equitable relief. S&P has been cooperating with the SEC and intends to continue its cooperation.

Key Highlights

  • 1S&P Global Inc. (then The McGraw-Hill Companies) received a Wells Notice from the SEC.
  • 2The notice concerns S&P's ratings for a 2007 collateralized debt obligation (CDO) offering, Delphinus CDO 2007-1.
  • 3The SEC Staff is considering recommending a civil injunctive action against S&P Ratings Services.
  • 4Allegations involve potential violations of federal securities laws related to the CDO ratings.
  • 5The SEC may seek civil penalties, disgorgement of fees, and other equitable relief.
  • 6A Wells Notice is not a formal finding of wrongdoing and allows S&P to respond.
  • 7S&P is cooperating with the SEC investigation and intends to continue doing so.

Frequently Asked Questions

A Wells Notice is a formal notification from the SEC Staff that they are considering recommending an enforcement action against a company or individual. It is not a formal accusation or finding of wrongdoing, but rather an opportunity for the recipient to present their side of the story and arguments against the proposed action before the SEC makes a final decision.

The SEC Staff's notice specifically relates to S&P's ratings for a particular 2007 offering of collateralized debt obligations (CDOs) named "Delphinus CDO 2007-1".

If the SEC Staff decides to proceed with an enforcement action, they may recommend that the Commission seek remedies such as civil money penalties, disgorgement of fees earned by S&P for its rating services, and other appropriate equitable relief.

No, the Wells Notice is a preliminary step. It indicates the SEC Staff's *consideration* of recommending an enforcement action based on their investigation into S&P's ratings for the Delphinus CDO 2007-1. It is not a formal finding or allegation of wrongdoing at this stage.