WASHINGTON (CN) - Egan-Jones Ratings Co. and its president Sean Egan lied to the SEC when they applied to become a Nationally Recognized Statistical Rating Organization for securities, and will be barred for 18 months, the SEC said Tuesday.
In its cease and desist order on Tuesday, the SEC said: "EJR violated Exchange Act Section 15E(a)(1) and Rule 17g-1(b) thereunder when it made willful and material misrepresentations and omissions in its July 2008 application to the Commission to register as a Nationally Recognized Statistical Rating Organization ('NRSRO') for issuers of asset-backed securities ('ABS') and government securities. In EJR's July 2008 application to register in these two additional classes, EJR falsely stated that, as of the date of its application, it had 150 outstanding ABS issuer ratings and 50 outstanding government issuer ratings. EJR further falsely stated in its application that it had been issuing credit ratings in these categories as a credit rating agency on a continuous basis since 1995. In fact, at the time of its July 2008 application, EJR had not issued - that is, made available on the Internet or through another readily accessible means - any ABS or government issuer ratings. EJR's willful misstatements and omissions concealed the fact that it did not meet the requirements for registration of an NRSRO with respect to these categories. Egan signed the application on EJR's behalf, certifying that it was 'accurate in all significant respects,' even though he knew or should have known that it contained these material misrepresentations and omissions."
Egan-Jones is based in Haverford, Pa. Sean Egan is its founder, owner and president.
The SEC sued them in April 2012.
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