Corporate Scorecard is paid by clients such as governments, companies and investors to assess the risk of counterparties, rather than by issuers to rate the securities they are selling, according to an e-mailed statement.
“Whether it’s a wholesale investor looking at a particular issuer, or a government department assessing a particular company, they are our client and so the remuneration line for us is direct to them,” said Walters. “Therefore, we don’t have that inherent conflict of interest of being paid by the issuer.”
Moody’s Investors Service, Standard & Poor’s and Fitch Ratings have been criticized by investors and lawmakers including U.S. Senate Banking Committee Chairman Christopher Dodd, who has said the companies wrongly assigned top credit rankings to U.S. subprime-mortgage bonds. The companies have said their assessments are opinions, shielded from litigation under the First Amendment of the U.S. Constitution.
Corporate Scorecard may seek a retail license in the future, which would allow the firm to provide its ratings to the public, Walters said.
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