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By Bloomberg

Standard & Poor’s agreed to be suspended from rating the biggest part of the commercial-mortgage bond market and pay almost $80 million to state and federal authorities over claims it bent criteria to win business.

S&P misled investors about the methodology it used in 2011 to rate eight commercial-mortgage backed securities, the U.S. Securities and Exchange Commission said in a statement on Wednesday in Washington. The company will pay about $58 million to the SEC and an additional $19 million to attorneys general for New York and Massachusetts to settle the matter.

S&P said in a statement that it takes compliance with regulatory obligations “very seriously” and continues to invest in “controls and risk management throughout the organization.”

The accords are separate from lawsuits by the U.S. Justice Department and 19 states and the District of Columbia against S&P related to securities backed by subprime home loans that the company graded years earlier. The company is close to settling those suits with a $1.4 billion penalty that may be reached as soon as next week, according to two people with knowledge of the matter. The deal might be delayed because of the number of parties involved, one of the people said.

Courts

Barefoot Dasher Gets 2 1/2 Years for Trading on Releases

An investor relations consultant who ran barefoot from court after being charged with trading on advance peeks he got from company press releases was sentenced to 2 1/2 years in prison, at least six months less than federal guidelines suggested.

Michael Lucarelli, a former consultant for the investor- relations firm Lippert/Heilshorn & Associates Inc. who said he now wants to become a truck driver and go to North Dakota, pleaded guilty in September to trading on information he learned from draft press releases prepared for clients.

Lucarelli appeared in court on the day of his arrest, Aug. 26, wearing a sleeveless T-shirt, off-white pants and flip-flop sandals. After being charged, he ran from the Manhattan courthouse to avoid press cameras, leaving his sandals behind and fleeing into Chinatown.

Video of Lucarelli’s barefoot dash appeared on cable news programs such as the “The Daily Show with Jon Stewart.”

According to the complaint, Lucarelli traded on information he got from press releases in which co-workers were preparing to announce corporate events including earnings and mergers.

The case is U.S. v. Lucarelli, 14-mg-01878, U.S. District Court, Southern District of New York (Manhattan).

Interviews/Commentary

Treasury’s Lew Says ‘Dysfunctional’ Tax System Needs Overhaul

Treasury Secretary Jack Lew talked about President Barack Obama’s proposal to overhaul the U.S. business tax system and the outlook for the economy.

Lew, speaking at the Brookings Institution in Washington, also discussed the need to improve U.S. infrastructure. Senior fellow David Wessel moderated.

For the video, click here.

Comings and Goings

SEC Says Investment Management Chief Champ to Leave Agency

Norm Champ, the head of the Securities and Exchange Commission’s Division of Investment Management, who played a leading role in shaping the reform of money-market rules, will leave the agency later this month, the regulator said in a statement.

He served five years in senior leadership posts, the agency said.

Among Champ’s reforms was the creation of the Risk and Examination Office in the Division of Investment Management, according to the statement.

Champ’s return to the private sector was reported earlier by the Wall Street Journal.