- - Wednesday, May 18, 2011

WHITE HOUSE

Gallagher nominated as SEC commissioner

President Obama plans to nominate Daniel Gallagher as a commissioner at the U.S. Securities and Exchange Commission, the White House said Wednesday.

Mr. Gallagher is a partner in the securities department of the law firm Wilmer Cutler Pickering Hale and Dorr.

He previously served as a deputy director of the SEC’s division of trading and markets, and was co-acting director of that division from April 2009 to January 2010.

SEC

Tighter rules sought for agencies rating debt

Federal regulators advanced tighter rules Wednesday for agencies that rate the debt of companies and governments.

Credit ratings can affect a company’s ability to raise or borrow money and also influence how much investors pay for securities.

The big three rating agencies — Moody’s, Standard & Poor’s and Fitch Ratings — were criticized for helping fuel the 2008 financial crisis by giving low-risk ratings to high-risk mortgage securities. Those investments later soured when the housing market went bust. Critics say the agencies have conflicts of interest because they are paid by the same companies they rate.

The new rules, which were required under last year’s financial overhaul, would force agencies to provide more details about how they determine each rating. They also would bar the agencies’ sales people from participating in the ratings process, and agencies would be required to review and potentially revise their ratings in cases where an employee was later hired by a company he or she rated.

FEDERAL RESERVE

Minutes: Most want rate hikes before asset sales

Most Federal Reserve officials prefer to raise rock-bottom interest rates before selling assets when the time comes to tighten policy, according to minutes of their April meeting.

The minutes, released Wednesday, showed worries about inflation rising among Fed officials last month before a big surge in oil prices subsided. At the same time, the minutes stressed the April discussion did not indicate the Fed was ready to start tightening policy any time soon.

Raising interest rates from their current level near zero would enable the Fed to lower them again in response to any future economic shocks.

CONSUMERS

Mortgage disclosures get another revamp

NEW YORK — A federal consumer watchdog is taking steps to make it easier to comparison shop for a mortgage.

The Consumer Financial Protection Bureau launched its “Know Before You Owe” project Wednesday. It is asking for the public’s feedback on how to simplify the paperwork borrowers receive when applying for a home loan. The bureau unveiled two prototypes of a form that eventually will replace the current required disclosures.

The bureau will begin testing the forms to determine which is easier to understand; it also wants suggestions on how to further clarify the expenses associated with a mortgage. The goal is to make it easier for borrowers to compare loan terms.

TECHNOLOGY

Sony: Security flaw found; shutters website

NEW YORK — Sony Corp. shut down a website set up to help millions of users affected by April’s massive data breach after finding a “security hole.”

The site had been designed to help 77 million users of its PlayStation Network reset their passwords after finding the security weakness.

The issue, which Sony alerted customers to on its PlayStation website, marks yet another setback for the company, which has been under fire since hackers broke into its systems about a month ago.

From wire dispatches and staff reports

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