Michael Gass on Credit Rating Agencies
Securities Law360 and Finance Law360
| February 3, 2010
| Michael T. Gass
Michael Gass wrote an article featured in Securities Law360 and Finance Law360. His article, “The Changing Landscape For Credit Rating Agencies,” explains how credit rating agencies were once protected under the First Amendment but now they are being held for unjustifiably giving high ratings.
Traditionally, it has been difficult to hold credit rating agencies accountable for granting improper ratings because they sought protection of the First Amendment and argued that ratings were a protected form of free speech.
Since late 2008, various lawsuits have arose finding credit rating agencies responsible for unjustifiably giving high ratings to risky instruments. In response, the SEC approved new rules to increase oversight of the credit rating industry. These new rules require credit rating agencies to provide more information about their rating history and allows competing agencies to offer unsolicited ratings for structured finance products.