Morningstar Credit Ratings has agreed to pay $3.5 million to settle charges from the Securities and Exchange Commission that it violated conflict of interest rules when its head of business development instructed analysts to identify business targets and pursue them through, among other things, offers to provide indicative ratings.

According to the SEC, from mid-2015 through September 2016, credit rating analysts in Morningstar’s asset-backed securities group engaged in sales and marketing to prospective clients. In one instance, a Morningstar analyst wrote a commentary specifically aimed at a potential client issuer and sent it to the issuer to win business. The issuer eventually became a Morningstar client, the SEC said.

“Credit rating agencies must be vigilant to prevent potential conflicts of interest between their ratings functions and their sales and marketing activities,” the Chief of the SEC Enforcement Division’s Complex Financial Instruments Unit, Daniel Michael, said in a statement. “As the SEC’s order finds, Morningstar sometimes enlisted its analysts in business development efforts, introducing the exact conflict of interest that the rule is intended to eliminate.”

The company neither admitted nor denied the charges.

“MCR cooperated with the SEC’s multi-year investigation and believes the settlement is in the best interest of the company,” Morningstar said in a statement. “There are no allegations that any credit ratings issued by MCR were affected by the conduct described in the settlement.”

After the 2008 financial crisis, the SEC was given oversight responsibility for the ratings agencies but enforcement actions against them have been rare.

“MCR takes its regulatory obligations seriously, and the integrity of its credit ratings is of paramount importance,” the company said. “As part of its integration with DBRS, which Morningstar acquired last year and well after the investigated activity took place, the combined DBRS Morningstar has enhanced and will further strengthen policies, procedures, and internal controls.”

Morningstar also committed to conduct training and implement changes to internal controls.

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