What allegations has Egan-Jones made against the SEC?

Egan-Jones has accused the SEC of making an "incendiary allegation" in an order that it claims is "unfair and demonstrably harmful" to its business.

Why is Egan-Jones concerned about the SEC's order?

Egan-Jones is concerned that the SEC's order, which questioned its ability to produce credit ratings with integrity, uses ambiguous language that could imply its overall authorization is under review.

What action does Egan-Jones want the SEC to take?

Egan-Jones has requested that the SEC promptly "correct and limit" the language in its order to pertain only to Egan-Jones' application for new licenses.

Home / Business and Economy / Egan-Jones Fights Back Against SEC "Integrity" Questions

Egan-Jones Fights Back Against SEC "Integrity" Questions

26 Mar

Summary

Rating agency Egan-Jones claims SEC's language is "incendiary" and harmful.
SEC order questions Egan-Jones' ability to produce ratings with integrity.
Egan-Jones requests SEC to correct ambiguous language in its order.

Egan-Jones Fights Back Against SEC "Integrity" Questions

Egan-Jones, a credit rating agency, has formally accused the US Securities and Exchange Commission (SEC) of issuing an "incendiary allegation" that has negatively impacted its operations. The agency submitted a letter to the SEC on Wednesday, seeking a correction to the phrasing used in a recent SEC order.

The SEC order questioned whether Egan-Jones could "consistently produce credit ratings with integrity." Although the order arose from Egan-Jones' application to expand its rating services, the agency fears the language implies a broader critique of its overall business.

Egan-Jones argues that while a "sophisticated reader" might interpret the SEC's concerns as limited to new debt classes, the wording is ambiguous. The firm is concerned this could lead to a significant negative implication regarding its current authorization, which has already caused "collateral harm."

The rating agency, founded in 1995, has become a significant player in the private debt market. Last year, its analysts rated over 3,000 private credit deals, and more than 14,000 since 2019. Its status as a nationally recognized statistical rating organization is crucial for insurers' regulatory capital calculations.

Egan-Jones requested the SEC promptly "correct and limit this language to the application for the two licenses" to mitigate the ongoing harm to the firm. The SEC declined to comment on the letter.

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