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Risk ratings, structured finance who's who

The departures of Ms. Tillman and Ms. Rose come as S&P President Doug Peterson works to forge a new identity for the firm and restore a reputation tarnished by the crisis. The former Citigroup Inc. banker has sought to enhance the firm's internal controls while championing analysts' independence.

Some former S&P analysts say those changes, some under way since Mr. Peterson took over in September, have been slow going. They say many of their one-time colleagues who oversaw the ratings on complex mortgage-linked deals have remained at the firm since 2008--despite calls from investors, regulators and lawmakers for wholesale changes to the way S&P and the other major rating firms do business.

An S&P spokesman declined to comment.

Despite the backlash, S&P and rivals Moody's Investors Service and Fitch Ratings remain the dominant players in the business of ratings everything for corporate and sovereign debt to asset-backed securities.

The Justice Department and the Securities and Exchange Commission are investigating S&P's crisis-era ratings on mortgage-linked deals, people familiar with the matter have said. Former S&P employees who have been questioned as part of the probe say that Justice Department investigators have expressed consternation that so many of the managers who oversaw the ratings on mortgage-linked securities remain at the firm, making it difficult for them to speak with a broad group of former analysts.

A Justice Department spokeswoman declined to comment.

Mr. Peterson succeeded Deven Sharma in September. S&P replaced its chief credit officer, Mark Adelson, in early December. Mr. Adelson was hired by Mr. Sharma in May 2008 and given the mandate to make it harder for debt-issuers to earn a triple-A from the firm. Mr. Adelson was moved to a "senior research fellow" position, considered by former and current S&P employees to be a demotion. At the time Mr. Adelson had declined to comment.

The firm also announced earlier this month that David Jacob, who succeeded Ms. Rose as S&P's structured finance chief, would step down at the end of the year.

Vickie Tillman, who served as S&P's executive vice president until 2009, is in talks to leave S&P parent McGraw-Hill Cos., a person familiar with the matter said. She is currently head of global sustainability business development at McGraw-Hill.

Joanne Rose, who from 1999 until 2008 had run the S&P team that rated mortgage securities and other structured-finance deals, will leave the firm in January, according to people familiar with the matter. Some of those ratings are now the subject of probes by U.S. prosecutors and securities regulators.

DECEMBER 28, 2011, 3:38 P.M. ET
Two Crisis-Era S&P Officers to Leave


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