(Reuters) – Kroll Bond Rating Agency LLC will pay $ 2.01 million, mainly in fines, to settle U.S. Securities and Exchange Commission civil charges because some of its practices were insufficient to ensure its ratings would be correct, the regulator said on Tuesday
The SEC said that KBRA had analysts make adjustments that significantly affected credit ratings for commercial mortgages with collateral without requiring them to have an analysis method or explain their motives for the adjustments.
KBRA's rating for collateral credit combination is also stated. Banknotes, which often combine a series of interest-paying securities and an unclassified share, did not reflect potential payments from cash flows to debtors.
"Rating companies play a crucial portfolio role in the securities market" and must enforce policies "To ensure consistency and integrity in credit ratings," Daniel Michael, Head of the SEC's Executive Complex Financial Institutions
Payment from New York-based KBRA includes $ 1
In a statement, KBRA stated that it was behind the integrity of its ratings, methods and processes, and did not acknowledge or deny errors.
Credit rating agencies assess companies and the securities they issue, and investors use ratings to determine which securities are worthwhile. Rating measures often move markets and some investors are restricted from buying securities that do not have a credit rating.
KBRA is among nine credit rating agencies registered with the SEC as nationally recognized statistical credit organizations. Catalog