U.S. securities regulators have brought charges against credit rating agency, Egan-Jones Ratings Company, for alleged misrepresentations in its application for registration.

The U.S. Securities and Exchange Commission announced charges against Egan-Jones Ratings, and its owner and president, Sean Egan, for what it says were material misrepresentations and omissions in the company’s application to register as a recognized rating agency for issuers of asset-backed securities and government securities, which was filed back in July 2008. The firm and Egan were also charged with material misrepresentations in other submissions to the SEC, and with violations of record-keeping and conflict-of-interest provisions governing rating agencies.

The commission alleges that in its application, EJR falsely stated that it had 150 outstanding ABS issuer ratings and 50 outstanding government issuer ratings; and that it had been issuing credit ratings in the ABS and government categories since 1995. And, it claims that the firm continued to make material misrepresentations regarding its experience rating asset-backed and government securities in subsequent annual certifications to the SEC. Additionally, it says that the firm failed to enforce its policies to address conflicts of interest; and failed to make and retain certain required records, including a detailed record of its procedures to determine credit ratings.

Against Egan, the SEC alleges that he provided inaccurate information that was included in EJR’s applications and annual certifications, and that he failed to ensure the firm’s compliance with the recordkeeping requirements and conflict-of-interest provisions.

None of the allegations have been proven, and the firm said that it is “disheartened” that the SEC has decided to pursue a case against it. “The SEC’s action has nothing to do with the quality, integrity or excellence of any rating EJR has ever issued. Rather, the SEC’s claims relate to a four year old application process. EJR intends to vigorously defend itself in this proceeding,” it says.

Further, the firm says that it sees the SEC’s action, “as an effort to silence Egan-Jones and maintain the status quo of a conflicted, issuer-paid ratings agency monopoly,” noting that it’s the only independent NRSRO, which is paid by subscribers, not by the issuer.

“The SEC is ignoring two acts of Congress, going after the honest and fiercely independent small business, while protecting the major issuer-paid players which, Congress found, maintain and perpetuate a corrupted business model which almost single-handedly destroyed the U.S. economy,” it adds.

“I am hopeful that the SEC’s action will be seen for what it is,” Egan says. “Rest assured, this firm will continue to speak out and be the honest, independent voice of true credit quality. We will not be silenced. We take great comfort in the fact that this has nothing to do with any ratings action this firm has ever taken.”