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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: long-gone who wrote (91878)	12/17/2002 4:41:36 AM
From: long-gone	Respond to of 116753

SEC-Sanctioned Rating Agencies Harbor Serious Conflicts of Interest Weiss Ratings Recommends Industry Reforms to Protect Investors PALM BEACH GARDENS, Fla., December 16, 2002 - Credit rating agencies sanctioned by the Securities and Exchange Commission (SEC), also known as nationally recognized statistical rating organizations (NRSROs), employ a business model harboring serious conflicts of interest, according to a statement filed with the SEC today by Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks. "The various ratings provided by the three NRSROs - S&P, Moody's and Fitch - are ostensibly for investors, but they are bought and paid for by the rated companies," stated Martin D. Weiss, Ph.D., chairman of Weiss Ratings, Inc. Why the NRSRO Business Model is Seriously Conflicted The business model of the three NRSROs involves the following conflicts of interest: All NRSROs are generally paid substantial fees for their ratings by the rated companies. All NRSROs derive most of their revenues from the rated companies - not from investors. Rated companies are empowered to begin or end a contract with a rating agency during the initial rating process. Two of the three NRSROs grant to the rated company the right to censor the publication of an initial rating that is unfavorable. The NRSROs derive additional revenues from rated companies separate from their ratings business. Unsolicited ratings by an NRSRO can give the appearance of extortion and have the potential to create an incentive for a company to purchase a more favorable rating. "There is a very real concern that the conflicts at the NRSROs pose danger both to the safety of investors and the stability of our financial system," added Dr. Weiss. "This is the same type of conflict of interest that has already undermined the objectivity of research at investment banking firms and the integrity of the nation's accounting system." Recommendations for a New NRSRO Business Model To protect investors from these conflicts of interest, Weiss Ratings recommends that the following reforms be implemented for existing NRSROs: 1. Conflicts of Interest Prohibited. All current NRSROs must be required to operate without any conflicts of interest in their business model. 2. Assessment Period. Existing NRSROs should be given a finite period of time to remove all conflicts of interest from their rating process. 3. Loss of NRSRO Status. At the end of the assessment period, the NRSRO designation should be removed from those rating agencies that do not comply. 4. Full Disclosure. As long as existing NRSROs continue to operate under the current, conflicted business model, full disclosure of all conflicts must be made by the NRSROs and the rated companies at the time the ratings are distributed to the public. Recognizing that it may be difficult to implement some of the above recommendations, Weiss Ratings also recommends the following changes to the NRSRO system: 5. Remove Barriers to Competition. Three additional rating firms should be given the opportunity to earn NRSRO designation, which would double the current number without requiring existing users of the ratings to revamp their policies. 6. New NRSRO Designation Criteria. To qualify for an NRSRO designation, each new rating firm must demonstrate a business model that is completely free of conflicts of interest. Firms must: a. offer exclusively unsolicited ratings, b. never accept payments or compensation in any form from the rated companies for developing or publishing credit ratings, c. offer ratings-related publications to the rated companies at the same price at which those products are offered to investors and consumers, d. maintain no separate business relationship with the rated companies, and e. never grant the rated companies the right to delay or suppress publication of a rating. 7. Default History Documented. All NRSROs must make public a database that details historical default rates by rating category. Default rate information must be presented in a clear and easy-to-understand format for investors. 8. Establishment of a Review Board. A review board should be established to evaluate and compare the track record of each NRSRO. Results must be disclosed to the public on a regular basis. 9. Complaint Process. A formal complaint procedure should be instituted so that rated companies can report any instances of perceived extortion by NRSROs. 10. Remove Regulation FD exclusion. NRSROs' exclusion from Regulation FD should be removed so that the public fully understands the reasoning behind any upgrades or downgrades to credit ratings. "Our recommendations will assure that the SEC-sanctioned rating agencies operate under a business model that puts the interests of investors above those of the rated companies," concluded Dr. Weiss. Consumers can view the complete text of the NRSRO statement filed with the SEC on the Weiss Ratings website at www.WeissRatings.com/nrsro.asp. Weiss Ratings issues investment ratings on more than 11,000 mutual funds and more than 9,000 stocks. Weiss also issues safety ratings on more than 15,000 financial institutions, including banks, insurance companies, and brokerage firms. Weiss Ratings receives no compensation from the companies it rates. Revenues are derived strictly from sales of its products to consumers, businesses, and libraries. -------------------------------------------------------------------------------- 4176 Burns Road, Palm Beach Gardens, FL 33410 · (561)627-3300 · www.WeissRatings.com

To: long-gone who wrote (91878)	12/17/2002 10:01:39 AM
From: IngotWeTrust	Read Replies (1) \| Respond to of 116753

Thanks for that Shanghai cut-n-paste this AM, Richard. I don't get much info on what the AMU on the come players/bloc are doing, so your find and posting, especially now that their gold market is open and soon to be open to joe and susie public persons is on the horizon. US Gold buyers clamoring for yellow/converging with Dinar clamor for yellow/converging with voracious Chinese clamor for yellow..... Ahso...we DO live in interesting times, eh? gold & platinum_tutor mailto:goldtutor@aol.com