The Securities and Exchange Commission is scrutinizing themethod Standard & Poor's used to cut the U.S.'s credit ratingand whether the firm properly protected the confidential decision,according to a person with direct knowledge of the matter.

SEC inspectors are examining S&P's policies for conductingsuch analyses and whether those procedures were followed when theNew York-based firm downgraded the U.S.'s credit rating Aug. 5,said the person, who declined to be identified because the inquiryisn't public.

S&P's downgrade of the U.S. contributed to an equity routthat erased about $6.8 trillion from global stocks since late July.U.S. officials have said the downgrade was based on a flawedanalysis that overstated the nation's debt by about $2 trillion,while S&P said the discrepancy doesn't change projections thatthe U.S. debt-to-gross domestic product ratio will probablycontinue to rise in the next decade.