Following Standard & Poor's decision last Friday to downgrade the U.S. credit rating, there have been a couple of interesting articles regarding S & P and the SEC. An article from MarketWatch on Tuesday afternoon asked whether it would be appropriate for the Commission to investigate S & P regarding possible leaks of information on Friday prior to the credit rating announcement given the heavy trading volume that day. Meanwhile, a report from Reuters this morning said that S & P is resisting efforts from the SEC which would S & P to disclose "significant errors" in how it calculates its ratings.

The MarketWatch article explained that "the Credit Rating Agency Reform Act … says a credit rating agency could have its [license] registration revoked if it leaked information about its pending downgrade decision before making that information publicly available." According to the article, the SEC did not comment on whether the Commission is conducting an investigation on that issue, but others interviewed indicated that if S & P (or Treasury officials, for that matter) leaked information prior to the announcement of the credit rating downgrade, such a an investigation would be appropriate.

According to Reuters, the SEC is considering new rules designed to improve the quality of ratings, including "a requirement that ratings agencies post on their websites when a 'significant error' is identified in their methodology for a credit rating action." In a letter dated August 8, 2011 regarding the proposal S & P President Deven Sharma expressed concern that "[i]f the commission were to define the term significant error ... we believe it would effectively be substituting its judgment" for the credit-rating agencies.