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Abstract Red Lines


Credit Rating Analysis


The 2008-2009 financial crisis was exacerbated by the role of credit rating agencies (CRAs), whose ratings of structured finance products, such as Collateralized Debt Obligations (CDOs) and Residential Mortgage-Backed Securities (RMBS), significantly influenced investor perceptions of market stability. The inflated ratings assigned to these products by CRAs contributed to their widespread acceptance and eventual collapse, triggering a cascade of defaults and economic turmoil.

Integra specializes in uncovering and analyzing fraudulent practices within the credit rating industry. We provide expert testimony and analysis on litigations and matters concerning rating agencies and other entities manipulating ratings systems.

Integra FEC Credit Rating Analysis Fraud Investigation Firm

Integra’s Methods of Uncovering Fraudulent Practices

  1. Data Collection and Analysis: Integra holds a wealth of proprietary data from multiple sources, including presale and surveillance reports from rating agencies, loan-level data, and internal communications from financial institutions. We employ advanced statistical techniques to identify discrepancies between reported and actual loan characteristics.

  2. Comparative Analysis: We conduct comparative analyses between different divisions within rating agencies, such as the ratings division and the surveillance division. By comparing the assumptions and outputs of these divisions, we can identify inconsistencies and biases that may indicate fraudulent practices.

  3. Model Evaluation: Our experts scrutinize the models used by rating agencies to evaluate structured finance products. We assess whether these models incorporate realistic assumptions and accurately reflect the underlying risks. Deviations from standard modeling practices are often indicative of ratings inflation intended to cater to issuer demands.

  4. Event Studies: By performing event studies, we analyze the impact of rating changes on the market performance of structured products. These studies help establish causal links between inflated ratings and subsequent defaults, reinforcing our findings of systemic biases.

  5. Case Studies and Results: Integra has contributed to many high-profile cases resulting in landmark settlements and the recovery of significant damages for investors impacted by inflated credit ratings. Some notable examples include:

  6. CDO Ratings Manipulation: In one case, our analysis revealed that a leading rating agency had made overly optimistic assumptions about the default correlation of assets within CDOs, resulting in inflated AAA ratings. By comparing the initial ratings with subsequent surveillance reports, we demonstrated that the ratings division consistently underestimated risks, which were later reflected in the downgraded ratings by the surveillance team.

  7. RMBS Misreporting: Our forensic investigations into RMBS revealed widespread misreporting of loan characteristics, such as loan-to-value ratios and borrower credit scores. We found that rating agencies failed to incorporate this misreported information into their models, leading to higher-than-justified ratings. Our findings were instrumental in several settlements where financial institutions admitted to these misrepresentations.

  8. Appraisal Inflation: In cases involving CMBS, we identified patterns of appraisal inflation where the values of underlying properties were systematically overstated. By cross-referencing appraisal data with market values and subsequent performance, we provided evidence of deliberate inflation aimed at securing higher ratings.

  9. Support for Litigation and Expert Testimony: Integra’s team of academic experts is always ready to provide rigorous analysis and expert testimony in legal proceedings. Our detailed reports and clear, evidence-based findings have been crucial in supporting the SEC, DOJ, and other regulatory bodies in their enforcement actions against fraudulent practices in the credit ratings industry. Our testimonies have clarified complex financial concepts and demonstrated the direct link between inflated ratings and financial losses.


The work of credit rating agencies during the lead-up to the 2008-2009 financial crisis had far-reaching implications for market stability and investor trust. Integra is dedicated to uncovering the fraudulent practices within this industry and holding responsible parties accountable. Our meticulous data analysis, comparative studies, model evaluations, and expert testimonies have consistently supported successful litigation and significant recoveries for defrauded investors. Through our efforts, we aim to foster greater transparency and integrity in the financial markets.

Need to investigate Credit Ratings? Contact Integra FEC
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