House Speaker John Boehner told Newsmax Tuesday that congressional committees will review the Securities and Exchange Commission’s recent decision to notify Standard & Poor's that it may face an enforcement action and serious legal penalties over ratings it offered on collateralized debt obligation bonds.
Asked whether the House would probe whether the administration was using the SEC notification against Standard & Poor's as political payback for downgrading the nation's credit rating, Boehner said Congress planned to "keep a close eye on what the SEC is doing."
“Clearly these rating agencies really missed the boat when it comes to the ratings of some of these debt instruments that were used in 2005, ’06, ’07, ’08. And as a result, some believe that these rating agencies are coming after the government to make up for their own shortcomings in the past.”
Boehner continued: “And I do believe that . . . the House Financial Services Committee will be looking at what the SEC is doing in order to make sure that they aren’t going after the private sector unnecessarily."
Last month, the SEC notified Standard & Poor's of the possibility of an enforcement action over the $1.6 billion bond it rated in 2007.
Rating agencies Fitch and Moody's also rated the same CDO, but they have not been notified of a possible SEC enforcement action.
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