SAC May Be Too Calm As It Carries On

 SAC May Be Too Calm As It Carries On

THE PR VERDICT: “C” (Distinctly OK) for SAC capital and its business as usual PR tactic.

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.

SAC Capital and the Art of Halting an Investor Stampede

 SAC Capital and the Art of Halting an Investor Stampede

The PR Verdict: “A” (PR Perfect) for SAC Capital. (Pictured: Steven Cohen)

The clock is ticking for SAC Capital Advisors, the hedge fund run by Steven Cohen, now linked to an insider trading case that the government is touting as one the largest of its kind. As regulators are said to be “closing in” on the fund, SAC clients, whose money is managed by the firm, now have 90 days to decide if they’ve had enough and want their money back. Should they redeem, or keep their money there?

SAC, which manages over $14 billion, recently confirmed to investors that the firm might face civil charges over the alleged insider trading scheme that has already led to the arrest of a former employee. Normally, news like this would have investors rushing for the exits, provoking a disastrous run on the fund. But if the firm intends to emerge from its latest legal worries with an ongoing business, reassuring investors while being transparent about its legal woes is the immediate PR challenge.

Not all investors are happy; some have indicated they want to redeem. One French bank has reportedly cashed in its chips already. But other large investors are on the record as saying they will reserve judgment and keep their money with SAC, reiterating their faith in the firm and its management. To SAC investors wavering about what to do, public confirmation from co-investors that their money is staying put is just the sort of signal they’re looking for. At the moment, some clever PR is calming a situation that could otherwise become very risky.

The PR Verdict: “A” (PR Perfect) for SAC Capital. Endorsement from others is always better than tooting your own horn.

The PR Takeaway: If you want the message about you to be heard, let your friends say it. SAC ‘s recent coverage contains a surprising number of reputable and well-known investors confirming that they are sticking with the firm – at least, for the moment. For SAC management seeking to reassure investors, it’s the best sort of message, and one that it couldn’t deliver itself.

To read more, click here.

 

 

 

Better Damage Control for Bryson?

 Better Damage Control for Bryson?By anyone’s standards, U.S. Commerce Secretary John Bryson has had a difficult past few days. News reports have been filled with tales of the senior government official rear-ending a car, driving away, and then crashing into a second car before police found him alone and unconscious in the Los Angeles suburbs.  What happened? Is there a scandal to be uncovered?

Having apparently suffered a seizure in his car while driving alone, he hit the headlines after being cited for felony hit-and-run. Instead of being booked in jail, he was taken to an area hospital for medical attention. That’s when the media went from excited to very excited.

The first thing his PR pointed out was that “Secretary Bryson was involved in a traffic accident” and that he suffered a “seizure.” While the official police comment was “The investigation is in its preliminary stages,” Bryson’s spokesperson quickly said that drugs and alcohol did not appear to have been a factor in the two alleged hit-and-run crashes.” So far, so good PR–but how else could the volume and excitement be turned down on this story?

The PR Verdict: “C” (Distinctly OK) for the PR handling of Bryson’s car accident. A clear and straightforward approach efficiently done. We’re withholding a top grade as one crucial element was missing…

PR Takeaway: Adding non-official voices to any incident softens the story. The problem with the PR response so far is that it remains in the realm of a police investigation. Take the story in another direction: Have a statement issued by his four daughters. The family is rallying around their father whose recovery is now the number one priority. Reiterate collective relief that no one was hurt and use a term other than “ investigation.” Far better to confirm Bryson is assisting with inquires and focusing on rest and a quick recuperation. Thanks for your kindness and understanding, case closed.

To read more click here.

 

 

What To Think About Bo Guagua’s Letter?

bo guagua story top2 300x168 What To Think About Bo Guaguas Letter?

PR Verdict: “C” for Bo Guagua, son (left) of Bo Xilai (right)

The Bo Xilai scandal and hints of a Chinese power struggle continue to grip those who understand it while the rest of us wonder why everyone involved in the scandal has such complicated names.  The plot has thickened yet again.  Bo Guagua, son of the once powerful Bo Xilai and a student at Harvard, has sent an open letter to his university’s newspaper to set the record straight.

Missing in action for several weeks, twenty-four year old Bo Guagua’s letter in the Harvard Crimson disappoints, reading as no more than a feeble attempt to drown out claims he was a party boy.  Were these the details we were waiting for, given that Chinese media have connected him tangentially with the suspected poisoning of British businessman Neil Heywood and his mother a key suspect?

The key points from the letter:  No, he does not drive a red Ferrari.  He did not get favorable treatment at Oxford or Harvard.  He is studious!   And his education was partly paid by scholarship.  What a good boy!

PR Verdict: “C” for Bo Guagua.  The Crimson was always a going to be a bigger pushover than the NYTimes or one of its peers, so it was wise to go there and have his message published without edits and additional questions.  But to what end?

PR Takeaway:  Moving the dial in the public arena requires taking a stand. This letter speaks only of peripheral issues and oddly focuses on the author only.  Not a word in support of either parent, concerns regarding the Chinese judicial system or conversely public support for the system, to curry favor with Chinese authorities.  The world is only too eager to hear from the son of both a powerful government official and a mother under investigation for murder.  He has the power to throw unwelcome spanners in the works.  Next time he might want to give the media a little more to go on.

To read the letter click here and to read more click here.

What’s your PR Verdict on this open letter?

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Wal-Mart, Anything You Would Like to Say?

walmart Wal Mart, Anything You Would Like to Say?

The PR Verdict: “A” for Wal-Mart and an elegant way to decline comment.

Big trouble ahead for retailer Wal-Mart.  The firm is reeling from Sunday’s NYTimes which claimed that as far back as 2005, Wal-Mart’s big wigs learned of allegations of widespread bribery of government officials in Mexico by its own peeps but did nothing about it.

At heart is an allegation that the internal review conducted by Wal-Mart at the time was a whitewash.  Allegedly conducted by some of the very same people who stood accused of paying up to $25 million in bribes, the NYTimes suggests the firm not only failed to investigate the matter properly but also failed to notify the relevant authorities.  In so doing the firm and its management are now potentially exposed to seriously punitive penalties.

What to say to the NYTimes?  Priority one in a case like this is to buy time and establish distance between what is alleged and where the company is now.  Wal-Mart’s besieged PR commented, “If these allegations are true, it is not a reflection of who we are or what we stand for.  We are deeply concerned by the allegations and are working aggressively to determine what happened.”

The PR Verdict: “A” for Wal-Mart’s response,  an elegant way to decline comment.  As an immediate PR response it established the allegations are unclear, circumstances vague and not what the firm is about.

PR Takeaway:  When in doubt buy time and create distance from the allegation.  While a legal investigation and fallout could take years, the damage to the stock price, relations with regulators and overall reputation will start hurting immediately.  There is very little time.  Suspend or remove the implicated management from the day-to-day workings of the firm.  The faster Wal-Mart can say that was then, this is now, the better for its stockholders.  This is going to be a crisis communications strategy that will have to run and run.

To read the original article click here and to read more click here.

What’s your verdict on Wal-Marts’s response?

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How Did Sybrina Fulton Make It Clear She Wasn’t Going There?

sybrinafulton How Did Sybrina Fulton Make It Clear She Wasnt Going There?

The PR Verdict for Sybrina Fulton: “A” for grace under pressure.

One of the more unintentionally instructive interviews on the Trayvon Martin case was Bill O’Reilly’s Friday interview on Fox with the mother of the murdered teenager.  For media trainers, SybrinaFulton’s interview was a fine example of control and consistency of message, despite the prodding of the host.

O’Reilly did most of the talking during the interview, asking plainly rhetorical questions while implicitly asserting that he was on the fair and balanced side of the debate.  He offered assistance to his guest as the trial approaches saying  “if you have anything you need, you come right to me”.  Sadly it was never clear what this meant.

At the beginning of the interview, O’Reilly asked imploringly “was I wrong to say that Al Sharpton should apologize?” referring to comments made by the activist at an earlier press conference.  Sybrina Fulton replied with calm sincerity  “You want me to comment on that?  I don’t know everything that’s behind it. …… So I’m not sure what response you want.”  For once,  O’Reilly gave in and moved on.

The PR Verdict:  “A” for Sybrina Fulton.  For grace under pressure and for not being sidetracked into a side issue .

PR Takeaway: When in doubt, bat the question back and repeat your key message.  Sybrina Fulton was clear with a simple demand: her son’s death to be duly investigated.   “I’m not sure what response you want,” was a line in the sand.  She was not going to be pushed into a corner fighting someone else’s PR battle.

To see the interview click here.

What’s you PR verdict on Sybrina Fulton’s interview?

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