Bank of NY Mellon’s (BONY) share price fall yesterday stems from the NY Attorney General’s decision to proceed with fraud charges relating to its currency business. Conventional PR practice when sued is to avoid inflaming the regulator in order to keep the door open for later out-of-court settlements. BONY’s reaction was to shout back and claim the AG’s case is based on “a fundamental misunderstanding” and “flat out wrong”. These comments may provoke the AG to dig in his heels but BONY has sent an equally powerful message to clients, employees and stockholders that it has nothing to hide.
The PR Verdict: “A” to BONY. Fighting words make your position clear while the case is generating headlines. In any case, a settlement of some sort is always possible.