ISS advises shareholders on whether to support mergers. Reuters reports that in a column titled “And They Call This Advice?”, Gretchen Morgenson criticized ISS’s support of Washington Mutual Inc.’s proposed acquisition of Providian Financial Corp. for $6.45 billion. Morgenson said in the column that ISS was “an influential but potentially biased advisory firm” because it sometimes receives fees from the companies whose deals it analyzes.
In Connelly’s letter to the newspapers publisher, he cited eight issues he said showed Morgenson’s “blatant disregard for factual and responsible reporting.” He said Morgenson was accusatory because ISS refused to disclose to her whether any key players in the Providian deal are ISS clients.
In the letter, Connelly demanded a personal meeting with the publisher, Arthur Sulzberger, Jr., but a Times spokeswoman told Reuters that a meeting with the newspaper may take place, but the publisher would not be involved.
Morgenson denied any intentional omission of facts and called Connelly’s accusation preposterous.
Connelly’s letter is here .