Judge narrows SEC bond rating lawsuit against Morningstar

Link: https://www.businessinsurance.com/article/20220106/NEWS06/912347036/Judge-narrows-SEC-bond-rating-lawsuit-against-Morningstar,-SEC-v-Morningstar-Cre

Excerpt:

A U.S. judge on Wednesday narrowed but refused to dismiss a Securities and Exchange Commission lawsuit accusing Morningstar Inc. of letting analysts adjust credit rating models for about $30 billion of mortgage securities, resulting in lower payouts to investors.

U.S. District Judge Ronnie Abrams in Manhattan said the SEC plausibly alleged that Morningstar Credit Ratings failed to provide users with a general understanding of its methodology for rating commercial mortgage-backed securities and lacked effective internal controls over its ratings process.

Author(s): Reuters

Publication Date: 6 Jan 2022

Publication Site: Business Insurance