In a bid to become more proactive and have a better controlling authority over the rating agencies, it is expected that the U. S. Securities and Exchange Commission will be coming up with newer financial laws.

The decision was taken after the case against Moody's Corp was dropped as there was uncertainty of the authority that SEC had.

After investigation, SEC found that Moody's ratings was found to have continued with inflated grades on almost $1 billion worth of debt in 2007 in Europe. The SEC report said that Moody's committee declined to correct its errors despite being given warning by the market watchdog.

In the report it was mentioned that since there was uncertainty with respect to the jurisdiction of the nexus between US and the ratings, the SEC was forced to remove the allegations.

All the three major rating agencies- Moody’s, McGraw-Hill Cos.’ Standard & Poor’s unit along with Fitch were under scrutiny from the Congress and the state regulators for the alleged roles in the sub-prime crisis

The ensuing ratings given by them has costed close to $1.8 trillion being washed away because of write downs.