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124 STAT. 1884 PUBLIC LAW 111–203—JULY 21, 2010

‘‘(B) EXCEPTION.—In the case of an action for money
damages brought against a credit rating agency or a
controlling person under this title, it shall be sufficient,
for purposes of pleading any required state of mind in
relation to such action, that the complaint state with
particularity facts giving rise to a strong inference that
the credit rating agency knowingly or recklessly failed—
‘‘(i) to conduct a reasonable investigation of the
rated security with respect to the factual elements
relied upon by its own methodology for evaluating
credit risk; or
‘‘(ii) to obtain reasonable verification of such fac-
tual elements (which verification may be based on
a sampling technique that does not amount to an audit)
from other sources that the credit rating agency consid-
ered to be competent and that were independent of
the issuer and underwriter.’’.

SEC. 934. REFERRING TIPS TO LAW ENFORCEMENT OR REGULATORY
AUTHORITIES.
Section 15E of the Securities Exchange Act of 1934 (15 U.S.C.
78o–7), as amended by this subtitle, is amended by adding at
the end the following:
‘‘(u) DUTY TO REPORT TIPS ALLEGING MATERIAL VIOLATIONS
OF LAW.—
‘‘(1) DUTY TO REPORT.—Each nationally recognized statis-
tical rating organization shall refer to the appropriate law
enforcement or regulatory authorities any information that the
nationally recognized statistical rating organization receives
from a third party and finds credible that alleges that an
issuer of securities rated by the nationally recognized statistical
rating organization has committed or is committing a material
violation of law that has not been adjudicated by a Federal
or State court.
‘‘(2) RULE OF CONSTRUCTION.—Nothing in paragraph (1)
may be construed to require a nationally recognized statistical
rating organization to verify the accuracy of the information
described in paragraph (1).’’.

SEC. 935. CONSIDERATION OF INFORMATION FROM SOURCES OTHER
THAN THE ISSUER IN RATING DECISIONS.
Section 15E of the Securities Exchange Act of 1934 (15 U.S.C.
78o–7), as amended by this subtitle, is amended by adding at
the end the following:
‘‘(v) INFORMATION FROM SOURCES OTHER THAN THE ISSUER.—
In producing a credit rating, a nationally recognized statistical
rating organization shall consider information about an issuer that
the nationally recognized statistical rating organization has, or
receives from a source other than the issuer or underwriter, that
the nationally recognized statistical rating organization finds cred-
ible and potentially significant to a rating decision.’’.

15 USC 78o–7 SEC. 936. QUALIFICATION STANDARDS FOR CREDIT RATING ANALYSTS.
note.
Deadline. Not later than 1 year after the date of enactment of this

LAWS Regulations. Act, the Commission shall issue rules that are reasonably designed to ensure that any person employed by a nationally recognized statistical rating organization to perform credit ratings—PUBLIC with on anorris VerDate Nov 24 2008 03:41 Aug 28, 2010 Jkt 089139 PO 00203 Frm 00510 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203