I predict that the primary defense that will be offered by S&P will be based on 'the credibility trap' itself.
The usual defense in cases like this is the First Amendment, that S&P was merely voicing an opinion. In this particular case, after having combed through over 20 million documents, the Department of Justice will attempt to prove that S&P was not merely voicing an opinion, but lying for gain, which is not 'protected speech.'
And most of them obviously cannot use the CEO defense of non-involvement and general ignorance of the entire situation, since they were being paid to write professionally informed judgements based on a factual due diligence. It would be like a surgeon arguing against malpractice because he was watching porn while performing surgery, and was so distracted he did not really notice what he was doing and was therefore merely a hapless bystander. Don't laugh. It seems to be working for MF Global, and several national governments.
Having these usual avenues thwarted, I suggest that S&P will point to all the other credible voices of the economists and politicians, 'very serious people,' who said either absolutely nothing, or voiced similarly misplaced opinions and 'mistakes in judgement' about the true nature of the unfolding financial frauds. How can you blame us, when no one of consequence said anything differently, forcefully.
So rather than key actors in a massive control fraud, they will portray themselves as hapless victims of the same mass delusion that affected most of the New York-London-Washington establishment, with many top universities in their supporting cast.
Will Alan Greenspan offer to be an expert witness on the perils of mistakes made while blinded by a sincerely held ideological delusion? Poor fellow, just a good chap making an honest error in judgement. He used a bad model. Who can blame him.
The defense will be 'the credibility trap' itself. You cannot convict us, without indicting yourself.
And if they are as I think they are, the S&P team will bring some credible implications of their case for the sacrosanct TBTF crowd to the plea bargaining process, and make its objective the best terms in a settlement while admitting no wrongdoing. We chose to settle because it was cheaper. We are victims of big government. The usual suspects will run with that.
It is a corollary to the credibility trap that no one who knows 'where the bodies are buried' will be personally inconvenienced beyond mere appearances.
It will be interesting to see how this plays out. It might set the tone for the 'investigations' of the coming collapse and scandal in the paper silver market. How could we have done anything wrong when the CFTC investigated us for five years, and sat next to our people almost every day?