Source: Daily Mail
A shock investigation of possible insider trading at Standard & Poor's has reportedly begun, with the country still reeling from the rating agency's historic downgrade of U.S. debt.
Authorities want to know who had prior knowledge of the decision, which sparked a wild week of trading on Wall Street that saw breathtaking losses and rapid rises.
The Securities and Exchange Commission, which has oversight of credit rating firms, has started asking preliminary questions, the Financial Times reported.
However, the regulator is not aware of a leak from an S&P insider, nor was it aware of an aberrational trade, the paper said.
Rumours of a post-bell downgrade were rampant on Wall Street early on Friday and some commentators suggested it sounded like a leak, which could have come from either S&P or the Treasury.
And, though misdeeds may be difficult to prove, S&P could have its license revoked if it leaked word of the downgrade, according to the 2006 Credit Rating Agency Reform Act.
The U.S. Senate Banking committee has also begun looking into last week's decision by S&P's to downgrade the U.S. credit rating.
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