July 23, 2023
I am writing to express my deep concerns about the corruption and lack of transparency that has occurred behind the SEC S7-32-10 rule-making process. As yourere aware, the S7-32-10 rule was proposed in 2010 as part of wider efforts to improve transparency and accountability in the financial sector.
The aim of the rule was to prevent conflicts of interest between rating agencies and the banks that use their services,. However, since the rule was proposed, it has been subject to intense lobbying efforts by industry groups, including the rating agencies themselves. These groups have argued that the rule would be overly burdensome, would harm market competition, and would have unintended consequences for investors and the wider economy. While these concerns may have some tiny amount of merit, it is clear that the lobbying efforts have gone far beyond legitimate advocacy and have instead sought to influence the rule making process. There has been reports of regulators colluding with industry representatives, of data being selectively disclosed to favored parties, and of conflicts of interest among SEC staff. This corruption has not only compromised the integrity of the rule making process but has also undermined the public's trust in the SEC and in the broader financial system.
Investors and the wider public have a right to expect transparency and objectivity from the SEC and its staff, and it is clear that this has not been the case with S7-32-10. I urge you to take action to address these concerns and to increase transparency and accountability in the SEC's rule making process.
In addition, I urge you to take steps to ensure that all SEC staff are held to the highest ethical and professional standards, and that any inappropriate conduct is actually dealt with promptly and effectively.
I am in full support for the SEC S7-32-10 rule and would like to see more steps taken to combat corruption and clandestine behaviors.
I believe that this rule is a critical step in improving transparency and accountability in the financial sector, and will help to prevent conflicts of interest between rating agencies and the banks that use their services.
Thank you for your time,
John