In a press release responding to the SEC's allegations, Egan-Jones said on April 19 that 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." The firm also stressed the unique role that it plays in rating corporate and government debt. Instead of getting paid fees by the issuers of the debt that it rates, Egan-Jones earns money through subscription fees by investors. "EJR is the only independent NRSRO and is a small business with fewer than 20 employees. It is paid by subscribers - not by the issuer. Multiple academic studies, including some issued just this past year, have shown that EJR issues the most timely, accurate and predictive ratings in the industry," said the firm in a statement. Egan-Jones also highlighted what it called a "near monopoly" held by larger agencies like Moody's and Standard & Poor's, while stressing their faulty ratings of debt securities tied to the real estate market. Earlier in April, the firm downgraded the debt of the U.S. government one notch to AA, citing the nation's debt burden. In November 2011, Egan-Jones downgraded its rating of investment bank Jefferies a notch to BBB- with a "negative" outlook just days after the collapse of brokerage MF Global, citing the company's exposure to the debt of peripheral European nations. That downgrade caused Jefferies stock to fall nearly 20%; however shares have since gained by over 50% to $16.23. In response, Jefferies strongly criticized Egan-Jones' ratings methodology and the accuracy of calculations on its European debt exposure contained within multiple reports. Shortly thereafter, Jefferies disclosed that it had minimal net exposure to European government debt. Sean Egan, a co-founder of Egan Jones named in the SEC's complaint was called the number one person who saw the financial crisis coming by Fortune Magazine - ahead of economist Nouriel Roubini and hedge fund managers David Einhorn and John Paulson. Egan-Jones won that honor for its harsher than average ratings assessments of firms like Ambac Financial, MBIA and Lehman Brothers prior to their troubles. For more on Egan-Jones and its spat with Jefferies, read about their credibility title bout in November. -- Written by Antoine Gara in New York.