Keep calm and carry on. In the world of crisis PR, that British wartime slogan is the standard mantra, but Steve Cohen, founder of beleaguered hedge fund SAC Capital, seems to be taking it to heart. The hedge fund, center of a long-running investigation into insider-trading, was in the headlines again last week when one of Cohen’s key lieutenants was arrested. The news capped a week of astonishing headlines.
As arrests mount and a $600 million penalty to settle some civil claims is in the works, founder Cohen’s PR response has been to carry on as normal. But what is normal for one of the world’s largest and most successful hedge funds? A spending spree to change the mood.
Three items made the news: the purchases of a Picasso painting for a cool $155 million, and of oceanfront property in East Hampton for $60 Million. Then throw in the sale of a Manhattan condo for $115 million and it’s clear that at SAC, the recent headlines are not putting the firm into crisis. They’re distracting, yes, but apparently, the show must go on.
THE PR VERDICT: “C” (Distinctly OK) for SAC capital and its business-as-usual PR tactic.
THE PR TAKEAWAY: Chutzpah has its merits – until it strays into willful arrogance. There is some wisdom in brazenly continuing with a business-as-usual approach while others might describe the sky as falling. Keeping calm and carrying on reassures investors, clients, and above all employees that this too will pass. In this case, however, SAC’s actions seem akin to thumbing their proverbial nose at authority. In a fight over potentially criminal allegations, SAC has less leverage than it thinks. This might be the moment to lay a little lower and not inflame prosecutors wanting their day in the sun.