After Standard & Poor’s historic downgrade of US debt kicked off a whipsaw week for Wall Street, the Securities and Exchange Commission is wondering who might have gotten a heads-up on the market-shaking move as part of a possible insider-trading probe.
The corporate watchdog wants S&P to provide it with the names of employees who were told about the impending cut to the country’s perfect credit rating before it was announced Aug. 5, the Financial Times reported.
The salmon-colored paper said the request is still in its early stages, however, as it was made by the SEC’s examination staff, which oversees the credit rating agencies, and not the enforcement staff, which cracks down on wrongdoing like securities fraud.
SEC spokesman Kevin Callahan declined to comment on the report.
Wall Street traders said rumors about the impending downgrade were making the rounds of trading floors as early as Wednesday — two days before the downgrade was announced late last Friday.
On Thursday, markets swooned, with the Dow Jones industrial average dropping more than 500 points.
In addition to the rumors of a downgrade, investors fretted about Europe’s debt crisis and a possible double-dip recession in the US.
Rumors also swirled that big players, such as bond shop Pimco, were taking large short positions in S&P futures through complex derivative products, further driving down stocks.
The next day, after a relatively calm session for the markets, S&P announced its controversial decision to downgrade the US, slashing the nation’s credit rating for the first time in 70 years to AA+ from AAA.
The news sent markets plunging again on Monday — the first day the markets had a chance to react — with the Dow losing a whopping 634 points, or 5.6 percent.
Fears that a downgrade would result in a sell-off in Treasury bills and higher interest rates have proven unfounded so far as investors continue to flock to the relative safety of Treasuries. kwhitehouse@nypost.com