Monday, February 11, 2013
It is not overstatement to say that Standard & Poor's is fighting for its life against government allegations of false ratings. The service might well deserve the negative attention it is getting, but from a PR perspective, the task of leadership is to keep the company alive. Much of that work will be legal but it will also involve communications -- proving to clients, the public and eventually the courts that how it evaluated debt securities before the bubble burst was proper. The government is no fool in the PR war. It has already made public e-mails from the time in which S&P employees questioned the ratings. As the article points out, Federal lawyers have a difficult path to achieve a conviction, but that doesn't mean they won't smear S&P throughout the process. They will. S&P should be on a war footing, if it isn't already. If it was wrong, it would be best to admit it now and get on with business. If it is convinced that it is innocent, it faces a long and draining battle.