ratings company type private company industry financial services founded 1995 founder sean egan & bruce jones headquarters haverford pennsylvania 1 united states area served global key people sean egan & bruce jones website www.egan jones.com egan jones ratings company also known as ejr was founded in 1995 and actively rates the credit worthiness of approximately 2000 high yield and high grade u.s. corporate debt issuers . egan jones positions itself as unique among nationally recognized statistical rating organizations nrsros for being wholly investor supported a structure designed to minimize the potential for conflicts of interest in assessing credit quality citation needed . the firm was granted nrsro status on december 21 2007 making it the ninth such organization to be recognized by the sec citation needed . the effectiveness of egan jones investor supported credit ratings has been measured by third parties including richard d. johnson of the kansas city federal reserve the stanford university business school and the university of michigan s business school . 3 sean egan principal of egan jones rating appeared before congress on october 22 2008 and argued that issuers of complex securities shopped for ratings which resulted in a race to the bottom in terms of credit transparency . rather than beat up moody s and s & p for behavior they d been financially motivated to pursue the government needs to support a new business model paid for by investors not issuers to support the funding ecosystem which has so severely broken down he asserted . 4 egan jones on july 16 2011 became the first nrsro to cut its rating on the united states from aaa to aa . 5 on april 5 2012 egan jones downgraded the credit ranking of the united states for the second time and within one year from aa excellent to aa very good assuming that the debt will reach 16.7 trillion by the end of 2012 while the gdp will not grow further 15.7 trillion limit and the debt to the gdp ratio will reach 112 % of the national gdp which is the highest level since the ww ii . 6 on september 14 2012 egan jones downgraded the credit rating of the united states for the third time from aa to aa the lowest of what is considered high grade as a reaction to qe3 . 7 egan jones was also the first to downgrade worldcom and enron . 8 9 contents 1 2012 sec charges 1.1 charges 1.2 egan jones response 1.3 settlement 2 references 3 external links 2012 sec charges edit charges edit the sec warned egan jones in october 2011 of a possible enforcement action . 10 on april 24 2012 the sec charged sean egan with numerous offenses including making false and misleading statements in the firm s application to become a nationally recognized rating agency violations of conflicts of interest and record keeping and falsely stating that he was unaware if his paid clients were long or short specific securities that egan jones rated . the securities and exchange commission issued charges against the company and its founder sean egan for material misrepresentations and omissions in the company s july 2008 application to register as a nationally recognized statistical rating organization nrsro for issuers of asset backed securities abs and government securities as well as material misrepresentations in other submissions furnished to the sec and violations of record keeping and conflict of interest provisions governing nrsros . 11 the sec alleged that among other violations ejr allowed two analysts to participate in determining the credit ratings for issuers whose securities they owned and ejr also 1 failed to make or retain a record of the procedures and methodologies it used to determine credit ratings . 12 egan jones response edit the material that we put down was accurate to the best of our ability . if we had to do it again today i d say exactly the same thing . sean egan ceo in an interview on cnbc 13 14 egan has stated our job is to get back to work and focus on providing timely accurate ratings and research . this will not have any effect on the firm s independence or our commitment to call credit quality as we see it regardless of issuer . 15 alan futerfas the firm s lawyer has denied the allegations stating that it s clear the sec has a bias against independent firms noting that the sec was using hyper technical claims and that these filings new forms started in 2007 are subject to significant interpretation and that the firm used good faith and answered questions on the forms as best as it could . 16 futerfas noted that not one word in the sec s order questions the quality integrity and timeliness of the egan jones ratings and criticized the sec for failing to take action against major nsros which had inflated their structured debt rated junk aaa and brought down the american economy according to congressional reports . 16 17 the sec has not responded to futerfas s remarks . settlement edit on jan. 22 2013 the sec announced that egan jones has agreed to settle charges that they made willful and material misstatements and omissions when registering to become a nrsro for asset backed and government securities . under the terms of the agreement the firm is barred from rating government and asset backed securities as a nrsro for at least 18 months . 18 references edit egan jones ratings press release pdf . egan jones ratings company . retrieved 26 april 2012 . studies congressional record oct 22 2008 egan jones cuts u.s. rating to aa on spending cut concern bloomberg july 18 2011 . leong richard 6 april 2012 . egan jones cuts u.s. rating on debt burden . reuters . retrieved 14 september 2012 . detrixhe john 14 september 2012 . egan jones cuts u.s. rating to aa after fed adds to stimulus . bloomberg . retrieved 14 september 2012 . macdonald elizabeth april 19 2012 . egan jones to fight potential sec charges . foxbusiness . retrieved 26 april 2012 . letter submitted by egan jones rating company to sec for november 12 2002 hearing . sec.gov . egan jones . 10 november 2002 . retrieved 26 october 2013 . neumann jeannette april 24 2012 . sec charges egan jones says firm exaggerated its expertise . wsj . retrieved 26 april 2012 . egan jones ratings co. and sean egan charged with making material misrepresentations to sec . u.s. securities and exchange commission . april 24 2012 . retrieved 26 april 2012 . http www.sec.gov litigation admin 2012 34 66854.pdf abramowicz lisa apr 19 2012 . egan jones defends credit rating business as sec weighs charges . bloomberg . retrieved 26 april 2012 . beller margo d. 19 apr 2012 . sean egan no basis for sec to accuse ratings firm . cnbc . retrieved 26 april 2012 . bases daniel ; luciana lopez apr 23 2012 . egan jones sec probe will not affect ratings independence . reuters . retrieved 26 april 2012 . a b fontevecchia agustino 2012 04 24 . egan jones lawyer accuses sec of bias against independent firms . forbes . retrieved 26 april 2012 . sec accuses egan jones of making false statements . associated press . 24 apr 2012 . retrieved 26 april 2012 . egan jones and founder sean egan agree to 18 month bars from rating asset backed and government securities issuers as nrsro . january 22 2013 . retrieved 18 february 2013 . external links edit external video sean egan on potential sec charges cnbc official website press release responding to sec charges april 19 2012 v t e nationally recognized statistical rating organizations nrsros standard & poor s moody s investors service fitch ratings kroll bond rating agency a.m. best company dominion bond rating service japan credit rating agency egan jones rating company morningstar inc. ratings and investment information inc. withdrawn retrieved from https en.wikipedia.org w index.php title egan jones ratings company & oldid 700622235 categories credit rating agenciesfinancial services companies of the united stateshidden categories pages using infobox company with unsupported parametersall articles with unsourced statementsarticles 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