Egan-Jones has defended its resources and compliance standards after the US Securities and Exchange Commission (SEC) raised concerns about the firm’s bid to rate government debt and asset-backed securities.
The response comes after the firm applied to regain the ability to rate the products following a ban of more than a decade. In response, the SEC questioned the small firm’s capacity to rate the assets.
The US regulator said that Egan-Jones’ application, alongside other information available to the commission, “raises questions about the adequacy of EJR’s financial and managerial resources to consistently produce credit ratings with integrity”. The SEC said in a filing it will hold a hearing on the matter and decide by August 12 whether to grant or deny the application.
In a letter, Sean Egan, chief executive of Egan-Jones Ratings Company, addressed the SEC’s criticism and said the firm takes its regulatory responsibilities “extremely seriously”, with more than 10 per cent of employees dedicated to compliance and governance. Egan also said the firm has expanded its internal compliance capabilities and strengthened board oversight.
Addressing the SEC order application directly, the ratings agency said: “We are confident in our qualifications, and view this as an important step in broadening our capabilities. We remain confident in the pathway forward.”
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The SEC’s questions also come as Egan-Jones Ratings was removed from the Bermuda Monetary Authority’s (BMA’s) list of recognised credit ratings providers.
The chief executive said the firm has a longstanding relationship with the BMA, “we aim to address recent questions and remain confident in a positive resolution”.
In recent years, Egan-Jones has carved a niche rating off-the-beaten-track transactions despite being much smaller than bigger firms such as Moody’s Ratings. In 2025, the firm said it rated more than 3,000 private credit deals with a team of about 20 analysts.
Egan said the firm is an accepted credit rating provider with the NAIC and has issued roughly 16,000 ratings, many of which have been filed by clients with the NAIC for regulatory purposes.
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In regard to accuracy he also stated: “For our unsolicited ratings of larger public companies, the two major legacy firms move toward our ratings in approximately 85 per cent of cases when they take rating actions, a meaningful indicator of our analytical accuracy.”
“Egan-Jones has grown significantly over the past decade and recently marked more than 30 years in operation,” the chief executive said. “Throughout that time, our focus has remained consistent: providing timely, independent, and analytically rigorous credit ratings with a proven record of quality and reliability.”
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