What is the main financial impact of these settlements on S&P Global Inc.?

The primary financial impact reported is the aggregate payment of $77 million ($58 million to the SEC and $19 million to New York and Massachusetts). While this is a significant outflow, investors should consider the relative size of this amount against the company's overall revenue and profitability, as detailed in subsequent financial reports, to assess its long-term impact.

What does the "time-out" from rating new CMBS mean for investors?

The "time-out" means S&P Ratings will not be issuing new ratings for U.S. conduit/fusion CMBS transactions until January 21, 2016. Investors in these specific types of securities may need to rely on ratings from other agencies or conduct additional due diligence during this period, as one major rating source is temporarily unavailable for new issuances.

Did S&P Ratings admit to wrongdoing?

No, in connection with these settlements, S&P Ratings neither admitted nor denied the charges. This is a common aspect of many regulatory settlements, allowing for resolution without a formal admission of guilt.

What specific regulatory violations were alleged?

The SEC found violations related to S&P Ratings' conduct in rating certain CMBS transactions, publications concerning CMBS criteria and research, and internal controls regarding RMBS surveillance. Specific violations cited include Section 17(a)(1) of the Securities Act of 1933 and various provisions of the Securities Exchange Act of 1934, including rules governing NRSROs.

SPGI 8-K SEC Disclosure

Summary

McGraw Hill Financial, Inc. (now S&P Global Inc.) announced on January 21, 2015, that its subsidiary, Standard & Poor's Ratings Services (S&P Ratings), had entered into administrative settlement agreements with the Securities and Exchange Commission (SEC) and Attorneys General of New York and Massachusetts. These settlements primarily relate to S&P Ratings' actions concerning U.S. conduit/fusion Commercial Mortgage-Backed Securities (CMBS) transactions from 2011 and 2012, as well as Residential Mortgage-Backed Securities (RMBS) surveillance controls. While S&P Ratings neither admitted nor denied the charges, the settlements involve a total payment of $58 million to the SEC, which includes civil penalties, disgorgement, and prejudgment interest. Additionally, S&P Ratings agreed to pay $19 million to New York and Massachusetts. A significant consequence for investors and the market is the "time-out" imposed on S&P Ratings from issuing preliminary or final ratings for new U.S. conduit/fusion CMBS transactions until January 21, 2016, though surveillance of existing ratings is permitted.

Key Highlights

1S&P Ratings entered into administrative settlement agreements with the SEC and state Attorneys General to resolve issues related to CMBS and RMBS ratings and controls.
2The company paid a total of $58 million to the SEC, covering civil penalties, disgorgement, and prejudgment interest.
3An additional $19 million was paid to the Attorneys General of New York and Massachusetts as part of the settlements.
4S&P Ratings agreed to a one-year prohibition ("time-out") from issuing new preliminary or final ratings for U.S. conduit/fusion CMBS transactions, effective until January 21, 2016.
5The settlements address findings of violations related to Section 17(a)(1) of the Securities Act of 1933 and various sections of the Securities Exchange Act of 1934, including rules pertaining to nationally recognized statistical rating organizations (NRSROs).
6S&P Ratings neither admitted nor denied the charges as part of these final settlements.
7The restrictions on issuing new CMBS ratings could impact market participants relying on S&P's credit assessments for these securitized products.

S&P Global Inc. 8-K Report, Corporate Update (Jan 21, 2015)

Summary

Key Highlights

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