S&P President Corbet Is Replaced (The folks that "guessed" at mortgage back security risks)

Wall Street Journal ^ | 8/31/07 | AARON LUCCHETTI and SERENA NG

[BurbankKarl]

McGraw-Hill Cos. replaced the top executive at Standard & Poor's Corp. as criticism of the company's financial-information division mounts for its role in the unfolding subprime-mortgage crisis.

Kathleen Corbet, S&P's president, is leaving to pursue other opportunities, McGraw-Hill Cos. said yesterday, without elaborating. She will be succeeded by Deven Sharma, 51 years old, a senior McGraw-Hill executive who has been at S&P since late last year.

S&P's bond-rating arm and several other rating services have downgraded hundreds of mortgage-backed securities tied to subprime loans in recent months. Critics charge S&P and others were too optimistic about the market for too long. Ratings firms say they did the best they could with the information available at the time. The company also compiles stock indexes such as the S&P's Composite Index of 500 stocks, commonly known as the S&P 500.

McGraw-Hill spokesman Steven Weiss said Ms. Corbet's departure wasn't related to criticism of its subprime-bond ratings.

Ms. Corbet, 47, who had a relatively low profile among ratings-industry counterparts, was brought in to run S&P in 2004 after former S&P President Leo O'Neill left amid a struggle with cancer. She ran the bond unit of investment-management firm Alliance Capital Management LP before coming to S&P. In an email to employees, Ms. Corbet said, "I look forward to spending more time with my family and pursuing new opportunities in my professional career."

McGraw-Hill's shares soared during most of her S&P tenure, in part because of booming credit markets. Shares have tumbled 26% since the start of this year. Earlier this month, they hit a 52-week low of $47.15. The shares rose 48 cents to $50.27 yesterday in 4 p.m. New York Stock Exchange composite trading.