8-KOther EventsExhibits & Filings

S&P Global Inc. 8-K Report, Corporate Update (Jul 23, 2014)

Filed July 23, 2014For Securities:SPGI

Summary

S&P Global Inc. (then McGraw Hill Financial, Inc.) disclosed on July 23, 2014, that it had received a "Wells Notice" from the U.S. Securities and Exchange Commission (SEC) staff. This notice indicates a preliminary determination by the SEC staff to recommend enforcement action against Standard & Poor's Ratings Services (S&P) for alleged violations of federal securities laws related to its ratings of six commercial mortgage-backed securities (CMBS) transactions from 2011 and subsequent public disclosures. The potential enforcement action could seek remedies such as a cease-and-desist order, disgorgement, pre-judgment interest, civil penalties, and sanctions against S&P's registration as a Nationally Recognized Statistical Rating Organization (NRSRO). The Wells Notice is not a formal finding of wrongdoing, but an opportunity for S&P to present its views before the SEC makes a final decision. S&P stated its intention to cooperate fully with the SEC investigation.

Key Highlights

  • 1McGraw Hill Financial, Inc. (now S&P Global Inc.) received a Wells Notice from the SEC staff on July 22, 2014.
  • 2The notice alleges potential violations of federal securities laws by Standard & Poor's Ratings Services (S&P).
  • 3The alleged violations pertain to S&P's ratings of six commercial mortgage-backed securities (CMBS) transactions issued in 2011.
  • 4The SEC staff may recommend sanctions including a cease-and-desist order, disgorgement, civil penalties, and revocation/suspension of S&P's NRSRO registration.
  • 5The Wells Notice is a preliminary step, allowing S&P to respond before the SEC makes a final decision.
  • 6S&P has been cooperating with the SEC and intends to continue doing so.

Frequently Asked Questions

A Wells Notice is a letter from the staff of the U.S. Securities and Exchange Commission (SEC) informing a party that the staff has made a preliminary decision to recommend that the Commission authorize an enforcement action against them. It is not a formal allegation or finding of wrongdoing, but rather an opportunity for the recipient to explain their perspective before the SEC makes a final decision.

The SEC staff alleges potential violations of federal securities laws by S&P concerning its ratings of six commercial mortgage-backed securities (CMBS) transactions issued in 2011 and the subsequent public disclosures made by S&P regarding those ratings.

If the SEC decides to pursue an enforcement action, potential remedies could include a cease-and-desist order, disgorgement of ill-gotten gains with pre-judgment interest, civil money penalties, and remedial sanctions such as the revocation or suspension of S&P's registration as a Nationally Recognized Statistical Rating Organization (NRSRO).

McGraw Hill Financial, Inc. stated that S&P has been cooperating with the Commission in this matter and intends to continue to do so. The company is using the opportunity provided by the Wells Notice to present its perspective and address the issues raised by the SEC staff.