October 30, 2015
The Securities and Exchange Commission this week yanked away the curtain at DBRS, a credit-ratings agency, and revealed that the firm employed only one analyst to conduct the majority of surveillance tasks for its 5,000 ratings of residential mortgage-backed securities and certain other complex financial instruments for about three years.
DBRS agreed to pay nearly $6 million to settle SEC charges that it misrepresented the agency’s surveillance and maintenance of ratings beginning in 2009.
DBRS represented that it would review the instruments’ ratings on a monthly basis. However, it did not perform the monthly reviews, nor did it even have adequate staffing and resources to conduct the monthly surveillance, according to the SEC.