S&P Fights Error Disclosure Rule, Accused Of Faulty Math

* S&P wrote to securities regulators Monday and said while it believes the company should disclose “significant errors” that affect ratings, the SEC should avoid rules that would define what TYPES of errors were significant enough to require disclosure (get it -)

* This is three days after Treasury Dept officials discovered what they called a mistake (of a mere $2 trillion) in the assumptions used by S&P to justify the downgrade of US debt

* The letter’s in response to proposed SEC regulations (ah, regulations - I sense snark - ed) that would tighten oversight  of major ratings firms like S&P, Moody’s and Fitch - part of the Dodd Frank Act - resulting from the 2008 financial crisis (which S&P totally missed (more snark - ed)

* The period for comments on the proposed SEC rule expired on Monday (no comment)

** Two Congressional committees - House and Senate - are reviewing the actions of the ratings agencies since 2008 - but taking very different angles

* Senate Banking seems concerned about math; House Financial Services Oversight and Investigations Subcommittee seems concerned about conversations and exchanges between Treasury and S&P before the prospect of a downgrade we first raised in April

** Rep Dennis Kucinich is demanding detailed financials from S&P; he accuses them of having an inherent conflict of interest - if the company owns government debt, their decision to downgrade could have an effect on McGraw Hill’s investment portfolio (their owners)