{"id":6073,"date":"2016-11-25T19:34:44","date_gmt":"2016-11-26T01:34:44","guid":{"rendered":"https:\/\/www.institutionalinvestorsecuritiesblog.com\/?p=1251"},"modified":"2022-05-17T14:29:44","modified_gmt":"2022-05-17T19:29:44","slug":"mortgage-backed-securities-news-former-standard-poor-executive-trial-sec-case-mortgage-bond-ratings-royal-bank-scotland-nomura-try-overturn-839m-mbs-fraud-ruling","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/mortgage-backed-securities-news-former-standard-poor-executive-trial-sec-case-mortgage-bond-ratings-royal-bank-scotland-nomura-try-overturn-839m-mbs-fraud-ruling\/","title":{"rendered":"Mortgage-Backed Securities News: Former Standard & Poor Executive On Trial in SEC Case Over Mortgage Bond Ratings & Royal Bank of Scotland and Nomura Try to Overturn $839M MBS Fraud Ruling"},"content":{"rendered":"

Barbara Duka, the ex-head of Standard & Poor\u2019s commercial mortgage-backed securities, is on trial before a Securities and Exchange Commission administrative law judge. Duka is accused of inflating the ratings of commercial mortgage-backed securities and not telling investors that she and her team had changed the way they formulated ratings for the securities in 2011.<\/p>\n

The SEC contends that Duka implemented the change after the credit rating agency lost market shares for rating commercial-backed securities using \u201cmore conservative criteria\u201d in the wake of the 2008 economic collapse. The regulator believes that Duka began to rate the securities in a way that favored the issuers so S & P could bring in more business.<\/p>\n

Meantime, investors \u00a0continued to believe that the ratings were conservatively-based. \u00a0Now, the Commission wants to bar Duka from associating with ratings organizations. It also wants her to pay financial penalties.<\/p>\n

The SEC brought its case against Duka last year around the time that the Commission and two state attorneys general announced that they had reached a $77M settlement with S &P. The regulator’s case was brought after Citigroup Inc.(C) <\/a>and Goldman Sachs Group(GS) had to withdraw a $1.5B commercial mortgage-backed securities offering because S & P told them about an internal review of the securities ratings. Duka, meantime, sued the SEC, questioning whether it had the right to pursue cases in-house before its own judge instead of in court.\u00a0 Although a district court judge ruled that the SEC could not move forward with its case against Duka, a federal appeals court decided otherwise.<\/p>\n

Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Barbara Duka, the ex-head of Standard & Poor\u2019s commercial mortgage-backed securities, is on trial before a Securities and Exchange Commission administrative law judge. Duka is accused of inflating the ratings of commercial mortgage-backed securities and not telling investors that she and her team had changed the way they formulated ratings for the securities in 2011. […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3845,3757,3883],"tags":[],"class_list":["post-6073","post","type-post","status-publish","format-standard","hentry","category-credit-rating-agencies","category-mortgagebacked-securities","category-standard-and-poors"],"yoast_head":"\nMortgage-Backed Securities News: Former Standard & Poor Executive On Trial in SEC Case Over Mortgage Bond Ratings & Royal Bank of Scotland and Nomura Try to Overturn $839M MBS Fraud Ruling — Investor Lawyers Blog — November 25, 2016<\/title>\n<meta name=\"description\" content=\"Barbara Duka, the ex-head of Standard & Poor\u2019s commercial mortgage-backed securities, is on trial before a Securities and Exchange Commission — November 25, 2016\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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