Is it just us, or are the regulators always one step behind? In its latest effort to prove its effectiveness, the SEC says it wants to reevaluate the rules governing credit-rating agencies. You know, those same agencies that assigned stellar ratings to those companies issuing pesky little mortgage-backed securities.

Now, mind you, we understand that the SEC doesn’t have the money or the manpower to investigate, say, the nearly 30,000 entities that fill out Form ADVs. And, that, in a free society, there is no small amount of “buyer beware” inherent in choosing a registered investment advisor—to say nothing of the gazillion of individual securities that are offered every year. Yet, it might have been useful if this structural initiative were undertaken in 2003 or 2004, when a revamp might have actually helped ease the pain of the housing bubble and eventual economic turmoil. But it’s 2009, and Mary Schapiro is concerned about the way credit rating agencies like Moody’s and Standard & Poor's are paid. (Better late than never, we suppose.) In general, financial institutions pay the agencies to rate them, creating a conflict of interest since the rating agency essentially becomes a client of the company being rated. According to the Washington Post, today the SEC will announce an April 15 roundtable to discuss the matter.

Speaking of credit rating agencies, JPMorgan Chase and Wells Fargo may face credit-rating downgrades courtesy of Moody’s this month. This week the agency changed its outlook on JPM to negative, from stable saying the bank’s results are likely to be “saddled by sustained high provisions and credit costs for the coming four to six quarters, due to increasing financial strains for U.S. consumers and the global recession.” In short, JPM, which has appeared relatively stable compared to some of its competitors, may be in for a few bumps. Jeffery Harte, a Sandler O’Neil banking analyst, told Bloomberg News that Moody’s outlook on the company “is pulling them in line with their peers.”

At Wells Fargo, the acquisition of Wachovia is putting a strain on the company’s capital ratio. As a result, Moody’s expects the bank to record high loan loss provisions in 2009.

But that’s not stopping Wells Fargo from paying former executive, David Carroll, an $8 million retention “bonus” if he stays with the combined company for one year. According to SEC filings, Carroll will make a salary of at least $700,000. He also will be eligible for a bonus of up to $4.2 million and a stock option award with a grant-date value of $5 million.

Wachovia says he has already agreed to give up a lot. "In his acceptance of his current role at Wells Fargo, David Carroll agreed to relinquish a substantial bonus severance agreement," the firm said in a comment. "His compensation arrangement reflects his vital role in providing continuity of leadership as a legacy Wachovia Corporation executive leading a business unit that is composed mostly of legacy Wachovia businesses, including our brokerage firm." Further, Wachovia Securities executives did not receive comparable retention arrangements, the firm says.

Who cares? Really. Carroll’s brokerage force of about 14,000 reps is getting a nice retention package from Wells Fargo. Why shouldn’t he? Oh, wait. No, they’re not. About two weeks ago, Wachovia reps were told they’d be getting zilch for a retention package. Oops.

Another lost cause, err—Bank of America, is dealing with demands today from a group that works with union pension funds and is calling for Ken Lewis’s head. In a letter to Bank of America lead director O. Temple Sloan, the CtW Investment Group called on the bank's board to remove Ken Lewis as chairman and CEO “in light of his disastrous missteps.” If the board refuses to remove Lewis, CtW says it will “call on shareholders at Bank of America’s Annual Meeting in April to vote against the re-election of Mr. Lewis, Lead Director Sloan and Corporate Governance Committee Chairman Thomas Ryan.” Yikes!

Meanwhile, the old cat and mouse game continues as New York Attorney General Andrew Cuomo issued subpoenaed the “Merrill Millionaires” last night. Cuomo’s office has been on the Merrill bonus witch hunt to determine whether the $3.6 billion in bonuses doled out to execs immediately before the Bank of America takeover were legit. Click here to read more about Cuomo’s dealings with Merrill’s bonuses.