Thomas J. Butler, head of the Securities and Exchange Commission's Office of Credit Ratings, said that he has referred multiple cases to the agency's enforcement division and is helping complete several industry regulations to address quality and transparency in how big debt deals are rated, the Wall Street Journal reported today. Those moves signal a potential flurry of regulatory activity involving ratings firms, which have been largely untouched as government oversight has increased in most other financial sectors in recent years. Butler, a former Citigroup Inc. executive, has been relatively quiet since launching the office in 2012 to oversee firms including Standard & Poor's Ratings Services and Moody's Investors Service. The creation of the office was mandated in the Dodd-Frank financial-overhaul law. His office has produced annual reports summarizing industry activity and monitored ratings firms to make sure they comply with existing rules that dictate how criteria are developed for evaluating bonds and whether internal protocols are followed, among other things. Butler's office doesn't have direct enforcement powers over firms, but monitors their activities and can make referrals to the unit headed by Andrew Ceresney, the SEC's top enforcement chief, for potential action. Butler declined to say how many referrals he has made or what firms are involved.
