Investor Service Claims Defamation Over Article on Providian Advice

By James B. Kelleher, Reuters

The chief executive of an influential U.S. investor advisory service has accused a Pulitzer-prize winning columnist for the New York Times of defamation for a column critical of the firm’s position on a pending merger.

In a letter dated Aug. 21 to Arthur Sulzberger Jr., the newspaper’s publisher, John Connolly, CEO of Institutional Shareholder Services, accused columnist Gretchen Morgenson of harboring an “accusatory agenda” toward his firm and disregarding facts. ISS advises shareholders whether to support mergers.

In a Sunday column headlined “And They Call This Advice?”, Morgenson criticized ISS’ support of Washington Mutual Inc.’s proposed $6.45 billion acquisition of Providian Financial Corp.

Some commentators and Putnam Investments, a large Providian shareholder, have said the credit card lender should have commanded a higher price.

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