Regulators are taking another look at the ratings agencies. The Securities and Exchange Commission is asking Moody’s (MCO), McGraw-Hill’s (MHP) Standard & Poor’s and Fitch about any errors in their ratings of structured finance products and steps they took to correct those mistakes, Reuters reports. The questions follow last week’s revelations that Moody’s misrated $4 billion worth of risky debt called constant proportion debt obligations, or CPDOs, and then changed its ratings guidelines when it discovered the error, allowing the paper to retain its triple-A rating.

Moody’s has hired lawyers to look into the CPDO mess, but the errors only fuel further skepticism about the ratings agencies’ management of the conflict of interest between the issuers who pay for ratings and the investors who use them. Sen. Charles Schumer last week demanded an investigation of Moody’s, citing “a culture of shirking responsibility that must end.” The SEC, which has been criticized for its handling of the latest mess as well, said it will propose new rules on the rating agencies in two weeks. Chairman Christopher Cox, who was mocked in some corners for his initially cautious reaction to the Moody’s news, now says, “We have ample jurisdiction to look into this.”

McGraw-Hill (MHP) is cutting back again. The New York-based publisher of Business Week and parent of ratings agency Standard & Poor’s said Tuesday it will cut 395 jobs - including 149 posts at its education unit and 246 positions at its financial services arm, S&P. The decision, which affects 2% of the company’s staff, is the second round of job cuts McGraw-Hill has undertaken in the past year. The company said in January that it had cut 600 jobs, half of them at the education business, in the fourth quarter.

“We are taking actions to further streamline our operations and lower our costs in the areas most affected by current market challenges,” said CEO Harold McGraw III. “The decision to reduce staff is always difficult, but we believe these actions will help improve efficiency while enabling us to focus our resources on those parts of our business that are experiencing the strongest growth.”

The move comes less than a month after McGraw-Hill posted a 44% drop in first-quarter profit, as revenue at S&P Credit Market Services slid 22% from a year ago. Two weeks ago, S&P named a new chief credit officer in a bid to bolster the market’s confidence in its ratings. But with the credit crunch in full bloom, it’s going to be a while before the ratings business is a growth engine again.

McGraw-Hill (MHP), owner of Standard & Poor’s and Business Week, said Tuesday it has cut 3% of its staff in a move to hold down costs. The New York-based business and educational publisher said its restructuring plan resulted in 600 fourth-quarter layoffs, half of them at McGraw-Hill Education. “Reducing staff is never an easy decision,” the company says, though it hastens to add the deal will “fortify the corporation’s long-term growth prospects.”

McGraw-Hill goes on to note that the global economy has three critical needs, including “the need for information transparency.” Fair enough. Yet in the same breath, McGraw-Hill lapses into obfuscating flack-speak. Its press release attributes the business publishing group layoffs, for instance, to the “reallocation of certain resources to support continued digital-evolution and productivity initiatives,” and blames the education group firings on “steps to centralize certain management functions and to better leverage outsourcing opportunities.” If this is information transparency, we’ll take a pass.