US regulators criticize credit raters

U.S. securities regulators raised serious concerns about an error that credit-rating firm Standard & Poor''s Corp. made in evaluating more than a thousand mortgage-linked bonds, highlighting the misstep in a report suggesting the rating industry remains plagued by lax controls. The snafu was just one of a litany of errors, potential leaks and other problems at credit-rating firms addressed Friday by the Securities and Exchange Commission, reported the Wall Street Juornal on Sunday. The SEC said its examiners had identified concerns at each of the 10 rating firms, including the three biggest: S&P, Moody''s Corp.''s Moody''s Investors Service and Fitch Ratings, a unit of Fimalac SA of France. The report comes as the rating firms are trying to restore reputations tattered by a steady storm of political and media criticism for their role in the financial crisis,the newspaper said. The report said that each of the three biggest raters had "made changes to improve its operations" since the financial crisis. But the SEC added that, despite these changes, it had identified "apparent failures" at every firm examined. The SEC''s report didn''t identify any of the firms that caused it concern. But one of the biggest problems cited by the SEC stems from S&P, the newspaper said, citing people familiar with the matter.