The McGraw-Hill Cos. today filed a Form 8-K with the Securities and Exchange Commission (SEC) that acknowledged that on Sept. 22, it received a "Wells Notice" from the Commission Staff.
The notice stated that the Staff is considering recommending that the Commission institute a civil injunctive action against McGraw-Hill unit Standard & Poor's. The action would be alleging violations of federal securities laws with respect to the firm's ratings for a 2007 CDO offering called Delphinus CDO 2007-1.
In connection with the probable action, the Staff might suggest that the SEC seek civil money penalties, disgorgement of fees and other appropriate equitable relief. according to a release from McGraw-Hill.
The release said that the Wells Notice is neither a formal allegation nor a finding of wrongdoing. It added that it gives S&P the chance to offer its perspective and to address the issues raised by the SEC Staff prior to any decision by the Commission on whether to authorize the commencement of an enforcement proceeding.
The parent company said that S&P has been cooperating with the Commission in this matter and intends to continue to do so.
For a full copy of the SEC filing, please click here.