Those upset with the ratings agency Standard & Poor's after the company caused brief havoc in U.S. financial markets by downgrading America's debt rating exacted a measure of revenge Tuesday -- S&P announced its president is stepping down following two weeks of controversy.
S&P's parent company, McGraw-Hill, said Tuesday that Deven Sharma, S&P's president since 2007, will be succeeded n Sept. 12 by Citibank Chief Operating Officer Douglas Peterson. The move caps two weeks of controversy that has embroiled the company since S&P created a global financial storm by downgrading the U.S. debt rating by one notch from AAA on Aug. 5.
S&P will continue to produce ratings that are comparable, forward looking and transparent, McGraw-Hill said in a statement. The company says Sharma will work on a strategic portfolio review for S&P until he leaves the company completely at year end.
The U.S. Justice Department is investigating the ratings agency over its actions in assigning high ratings to complex mortgage securities before the 2008-2009 financial crisis that developed in large part because of a mortgage and housing bubble.
Also, S&P management has been heavily criticized in the two weeks since the controversial U.S. debt rating downgrade. The company has received support from some who claim the agency accurately called America's political problems and high debt, currently at $14.5 trillion. But criticism from Washington and beyond has been harsh.
Other ratings agencies including Fitch and Moody's, have not downgraded the U.S. credit rating. Instead, they have reaffirmed AAA ratings. U.S. Treasury officials and President Barack Obama were critical of S&P's downgrade methodology, suggesting the agency made a $2 trillion calculation error in its determination.