Man Bites Dog: SEC Causes Downgrade

NEW YORK (TheStreet)--The Securities and Exchange Commission, that infamous wrist-slapper of financial crooks, has actually caused a major financial stock to be downgraded. On Friday, analysts at Bank of America Merrill Lynch downgraded Federated Investors to "Neutral" from "Buy" because of a widely expected rule proposal from the SEC that would tighten the rules for the money market fund industry. Federated, which is one of the largest money market managers in the U.S. and has 77% of its assets under management in money market funds, according to Merrill, is highly vulnerable. "We had previously believed proposals were tolerable for Federated, but the possibility that the SEC will propose liquidity 'hold-backs' which limit the amount investors can redeem from money market funds would fundamentally alter the product in our view, potentially making it less widely used," the report states. ... Click to view a price quote on BAC. Click to research the Banking industry.

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