On June 7, 2022, the U.S. District Court for the Southern District of New York entered a final judgment against defendant Morningstar Credit Ratings, LLC ("Morningstar"), a credit rating agency that the SEC charged with violating disclosure and internal controls provisions of the federal securities laws in rating commercial mortgage-backed securities (CMBS) from 2015 to 2017.

The SEC's complaint was filed on February 16, 2021 in federal district court in the Southern District of New York. According to the complaint, in 30 CMBS transactions that Morningstar rated from 2015 to 2016, the credit rating agency permitted analysts to make undisclosed adjustments to key stresses in the model that it used in determining the rating for that transaction. The complaint also alleges that Morningstar failed to establish and enforce an effective internal control structure governing the adjustments for a total of 31 transactions from to 2015 to 2017.

Morningstar Credit Ratings, LLC consented to entry of a final judgment ordering it to pay a civil money penalty in the amount of $1,150,000.

The SEC's litigation was led by James Connor and Edward Reilly and supervised by Melissa Armstrong. The SEC's investigation was conducted by Robert Leidenheimer, Brent Mitchell, and Lawrence Renbaum of the Complex Financial Instruments Unit and supervised by Assistant Director Reid Muoio.