The SEC has fined Standard & Poor’s ratings agency and banned them from rating mortgage backed (MBS) securities for a year:

Financial companies are still paying the price for the crisis of 2009, as Standard & Poor’s showed when it agreed on Wednesday to pay the US government and two states more than $77m to settle charges that it inflated its ratings of mortgage-backed securities.

In its first enforcement action against a major rating agency, the Securities and Exchange Commission accused S&P of fraudulent misconduct, saying the company loosened standards on its ratings to drum up business in recent years.

The agreement requires S&P to pay more than $58m to the SEC, $12m to New York and $7m to Massachusetts.

As part of its agreement with the SEC, Standard & Poor’s Ratings Services, a division of McGraw Hill Financial, will take a “timeout” from rating certain types of mortgage-backed securities for a year.

“These settlements involve findings of intentional fraud in 2011 and 2012, well after the financial crisis,” said Andrew Ceresney, director of the SEC’s enforcement division, on a call with reporters. “The financial crisis may be behind us, but these cases are an important reminder that the race-to-the-bottom behavior exists even though the financial crisis has ended.”

S&P said in a statement that it did not admit or deny any of the charges.

It’s likely the first in a line of settlements between S&P and government agencies. In 2013, the Justice Department and attorneys general from other states filed civil lawsuits against the company for misrepresenting risks in the years leading up to the financial crisis.

“This is the first time a major credit rating agency has been subject to a timeout,” Ceresney said. “It’s unprecedented.”

It is only unprecedented because the Obama administration has been so deferential to the banksters.

It’s chump change for them, and they are a (relatively) small player in the MBS ratings game, so they will be crying to the bank.

What should have happened is a criminal indictment, which would have been immediately followed by an Arthur Andersen style implosion.

That would make the banksters sit up and notice.