The downgrade put the notes well below the quality threshold set by fund regulators.
Investors, hedge funds, regulators, banks, and attorneys want to know: What really happens when a company misses a regulatory deadline?
The company also permitted a hedge fund, Canary Capital Partners, to trade rapidly in and out of Strong's funds, regulators said.
But after MF Global's blowup and the ensuing fallout from the missing funds, regulators said they were considering pushing again on the rule.
Industry executives have said that rules put in place in 2010 were adequate to shore up any weaknesses in the funds; regulators have said those rules did not go far enough.
Nervous depositors had withdrawn $16.5 billion of their money in the last 10 days, and a full collapse could have devastated the federal banking insurance fund, regulators said.
And building a fence would be preferable to the often-discussed notion of regulating hedge funds, said Kathryn B. McGrath, a lawyer and former federal fund regulator.
Last November it appointed Solange Vieira, a young high-flyer in the civil service, as the chief pension-fund regulator.
Mr. Roye, 44, who succeeds Barry Barbash as the nation's top mutual fund regulator, will join the agency in November.
Charles Schwab and Fidelity Investments already disclose their funds' after-tax returns, and Vanguard Group is moving in that direction, said Paul Roye, the commission's chief mutual fund regulator.
