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35 Conn. L. Rev. 1145 (2002-2003)
Rating Agencies Behaving Badly: The Case of Enron

handle is hein.journals/conlr35 and id is 1155 raw text is: Rating Agencies Behaving Badly: The Case of Enron CLAIRE A. HILL [T]he credit rating agencies were dismally lax in their cover- age of Enron. They didn't ask probing questions and gener- ally accepted at face value whatever Enron's executives told them.' I. INTRODUCTION Until November 28, 2001, the major rating agencies rated Enron's debt investment grade.2 On that date, they downgraded Enron's debt to be- low-investment-grade junk status.3 On December 2, Enron declared bankruptcy.4 The rating agencies' performance in rating Enron was far from stellar. The Sarbanes-Oxley Act of 2002, enacted in response to Enron and other debacles, requires the Securities and Exchange Commission (the SEC) to Visiting Associate Professor and Sloan Visitor, Georgetown University Law Center, and Asso- ciate Professor, Chicago-Kent College of Law. Thanks to Scott Faga, Gary Funderlich, Larry lsaacson, Frank Partnoy, Steve Salop, and the participants of the University of Connecticut School of Law Sym- posium for exceedingly useful comments. Thanks to Ameeta Patel, Georgetown University Law Cen- ter and McDonough School of Business Class of 2003, and Micah Thorner for excellent research assis- tance. I Press Release, Sen. Joseph Lieberman (D-Conn.), Chairman of the Senate Governmental Af- fairs Committee, Financial Oversight of Enron: The SEC and Private-Sector Watchdogs (Oct. 7, 2002), at http://www.senate.gov/-lieberman/speeches/02/10/2002A084000.htmi (last visited Jan. 13, 2003) (on file with the Connecticut Law Review). 2 STAFF OF SENATE COMM. ON GOVERNMENTAL AFFAIRS, 107TH CONG., FINANCIAL OVERSIGHT OF ENRON: THE SEC AND PRIVATE-SECTOR WATCHDOGS 84-89 (Comm. Print 2002) [hereinafter WATCHDOGS]. Id. at 89. 4Id. at I.

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