NEW YORK, March 13 (Reuters) - Egan-Jones Ratings was sued by two former executives who said they were fired after telling the U.S. Securities and Exchange Commission that the credit rating agency improperly let business concerns drive its ratings, including after last year's banking crisis.

According to a complaint filed in Manhattan federal court, former chief risk officer Michael Brawer and former head of ratings Philip Galgano were let go in January for whistleblowing about conflicts of interest in Egan-Jones' ratings practices.

They said their firings violated the federal Dodd-Frank Act's whistleblower protection provision, as well as New York labor law. Sean Egan, the agency's co-founder and chief executive, is also a defendant.

Egan-Jones' general counsel Eric Mandelbaum said in an email: "We are aware of the lawsuit and will be defending the matter."

The SEC declined to comment.

Egan-Jones is one of 10 so-called nationally recognized statistical ratings organizations, a group that also includes Moody's Investors Service, S&P Global Ratings and Fitch Ratings.

NRSROs assess the creditworthiness of companies, local and state governments, and countries.

Investors use their ratings to assess the safety of and value bonds and other debt that ratings recipients sell.

Brawer and Galgano objected to what they called an "ongoing pattern of improper conduct" that they reasonably believed could violate federal securities law.

Both accused Egan-Jones of pressuring staff to alter preliminary "indicative" ratings on private transactions to encourage potential customers to let it issue final ratings.

They also said Egan-Jones applied pressure to change ratings that appeared out of line with rivals' ratings and might be seen as inaccurate, and said its "points system" for rating analysts improperly took sales and marketing into account.

In addition, the plaintiffs said Egan demanded that Egan-Jones downgrade all "junk" rated banks even if ratings criteria did not justify it, following last year's seizures of Silicon Valley Bank and First Republic Bank.

An analyst allegedly told Galgano around May 5, 2023 that Egan expressed concern that his agency might be sued "upon any bankruptcy of any rated bank, if Egan-Jones did not immediately downgrade its rating of all banks below investment grade."

Brawer and Galgano said they periodically reported concerns about Egan-Jones to the SEC, including in several filings last year with its Office of the Whistleblower.

They said Egan harassed them after learning about their whistleblowing and fired them on Jan. 3 in retaliation, though neither had received any adverse performance reviews.

The lawsuit seeks to recoup a variety of pay and benefits, punitive damages, and other remedies.

The case is Brawer et al v Egan-Jones Ratings Co et al, U.S. District Court, Southern District of New York, No. 24-01895. (Reporting by Jonathan Stempel in New York Editing by Marguerita Choy)