The Securities and Exchange Commission is examining Standard & Poor's Ratings Services' last-minute decision to pull its ratings on a high-profile deal backed by commercial real estate loans, the Wall Street Journal reported today. The scrutiny relates to S&P's decision in July 2011 to pull its ratings on a new $1.5 billion commercial-mortgage-backed security (CMBS) issued by Goldman Sachs Group Inc. and Citigroup Inc. The unusual step sent the commercial mortgage securities market into turmoil and scuttled the deal for weeks, angering investors and issuers. The SEC's inquiry is part of its annual review of S&P and other credit-rating firms, but regulators are looking at whether it used more lenient standards to rate new CMBS than it used on outstanding deals.
