NEW YORK (AP) — The staff of the Securities and Exchange Commission is considering recommending civil legal action against the Standard & Poor's debt ratings agency over its rating of a 2007 collateralized debt offering.

Collateralized debt obligations, also known as CDOs, are securities tied to multiple underlying mortgage loans. The CDO generally gains value if borrowers repay. But if borrowers default, CDO investors lose money. Soured CDO's have been blamed for making the 2008 financial crisis worse. Ratings agencies have been faulted for being lax in rating CDOs.

The SEC staff said it may recommend that the commission seek civil money penalties, disgorgement of fees or other actions.

S& P has been under fire for its recent downgrade of U.S. debt, as well as several bad calls it made leading up to the financial crisis and economic meltdown that began in 2008. The unit's president stepped down last month.

McGraw-Hill Cos., which owns S& P, said Monday that it received a Wells Notice from the SEC's staff on Thursday.

In issuing Wells notices, the SEC enforcement staff gives companies the chance to make the case why charges are unwarranted. That means a formal decision by SEC commissioners to file charges may not occur.

S& P said it has been cooperating with the commission and plans to continue cooperating on the matter.

McGraw-Hill shares fell 90 cents, or 2.1 percent, to $42.03 in morning trading.

The news comes two weeks after McGraw-Hill announced that it plans to split up into two public companies with one focused on education and the other centered on markets, featuring the Standard & Poor's unit. The decision had been expected, as investors have pushed the New York company to boost the company's stock price, which has dropped by more than 40 percent since 2006.

McGraw-Hill Education will be the new company focused on education services and digital learning, while McGraw-Hill Markets will retain S& P and J.D. Power and Associates, a market research company. It also includes S& P Capital IQ, a provider of data, research, benchmarks and analytics and Platts, a provider of information and indices in energy, petrochemicals and metals.

McGraw-Hill was founded by James H. McGraw in 1888 when he purchased the company's first publication, The American Journal of Railway Appliances. Since then, the company has provided technical and trade publications, as well as information and analysis on global markets.