Egan-Jones fights SEC over 'damaging' credit rating allegations
Egan-Jones, a long-standing credit rating agency, has accused the US Securities and Exchange Commission (SEC) of making a damaging claim against its business. The firm, one of 11 nationally recognised agencies, demanded a correction to what it called an 'incendiary allegation' in a recent SEC order. Founded in 1995, Egan-Jones argues that the regulator's wording could undermine its reputation and operations. The dispute centres on an SEC order that questioned Egan-Jones' ability to 'consistently produce credit ratings with integrity'. The agency, led by CEO Sean Egan, also took issue with the SEC's reference to 'non-public information' in its assessment. Such language, according to Egan-Jones, risks harming its regulatory standing and commercial viability.
Over the years, the firm has built a substantial track record. Since 2019, its team of around 20 analysts has rated more than 14,000 private credit deals. In 2021 alone, they assessed over 3,000 such transactions. Its status as a nationally recognised statistical rating organisation (NRSRO) allows insurers to rely on its grades for calculating regulatory capital. The SEC currently recognises ten other NRSROs alongside Egan-Jones, including major names like S&P Global Ratings, Moody's Investors Service, and Fitch Ratings. Smaller agencies such as Kamakura, Morningstar Credit Ratings, and China Chengxin International also hold the designation. Egan-Jones now awaits a response to its request for a formal correction.
The outcome of this dispute could affect Egan-Jones' role in the credit rating market. A correction from the SEC would remove the contested language, while its refusal might leave the firm's regulatory status in question. The agency's future business operations depend on how the regulator responds to its challenge.
