“For years, Sean J. Egan has been trying to crack the cartel consisting of Moody’s Investors Service Inc., Standard & Poor’s and Fitch Ratings, credit-ratings agencies with quasi-government authority and enormous global influence,” writes Leslie Wayne in today’s New York Times.

“Mr. Egan, who runs a much smaller credit analysis firm in suburban Philadelphia, maintains that his judgment calls have been just as good — if not better — than those of the Big Three. But his pleas have been largely ignored by the Securities and Exchange Commission, which regulates credit agencies, and the marketplace has continued to confer rich margins on his competition.”

“But now, in the wake of Enron, Mr. Egan may at last get his hearing before the S.E.C., if not some satisfaction.”

“Already, the ratings agencies, which pass judgment on the financial health of companies and evaluate trillions of dollars in debt securities, have been hauled before Congress to explain why they failed to warn investors about Enron’s problems.”

“Spurred on by that Congressional concern, the S.E.C. has announced that it will begin hearings on the industry — including the regulations that have limited the business of debt rating to an oligopoly of three.”

” ‘We want to understand the whole rating organization industry and it’s operations,’ said Isaac C. Hunt Jr., an S.E.C. commissioner. ‘This is something we haven’t re-examined in a long, long time.’ William Thomas Cain for The New York Times Sean J. Egan, who runs the credit analysis firm Egan-Jones Ratings, has been seeking the Securities and Exchange Commission designation needed to give his ratings a government approval.”

“Among the topics that the S.E.C. plans to review are the economic barriers to entry, whether new consulting businesses started by some ratings agencies raise conflict of interest issues and whether the current regulatory system should be scrapped entirely and replaced with something else.”

“For Mr. Egan, the re-examination is long overdue. Since 1998, Mr. Egan’s company, the Egan-Jones Ratings Company, has been seeking the S.E.C. designation needed to give his ratings a government stamp of approval. That designation would give his opinions the same standing in the debt markets as those from Moody’s or S.& P., allowing him to expand beyond his current business of providing ratings only to a group of private clients.”