US vs. HSBC: Two PR Punches for the Price of One

 US vs. HSBC: Two PR Punches for the Price of One

The PR Verdict: “A” (PR Perfect) for the US government.

Everybody likes two bites at the PR cherry, and US prosecutors may have had their way when it comes to the latest fines levied against British banking giant HSBC. The headlines that HSBC was set to pay a record $1.9 billion penalty for ignoring possible money laundering came out on Tuesday. The announcement wasn’t official, but mysteriously there it was, hours before the official drop date.

News this big can’t be kept under wraps for long. HSBC was expected to agree to pay $1.9 billion to settle a probe in connection with money laundering from narcotics traffickers in Mexico. Also alleged was that HSBC intentionally allowed prohibited transactions with Iran, Libya, Sudan, and Burma while facilitating transactions with Cuba. Headline-making stuff.

Tuesday’s papers carried front-page stories with astonishing levels of detail, helpfully provided by the very trusty “people briefed on the matter.” Once the news was out, Wednesday ‘s media coverage gave even more detail. “HSBC is being held accountable for stunning failures of oversight — and worse — that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars,” read the official government statement on day two. Not unlike statements from the previous day, only this time it wasn’t attributed to someone “briefed on the matter.”

The PR Verdict: “A” (PR Perfect) to the US government for what seems like a well-orchestrated PR campaign to maximize publicity.

The PR Takeaway: For really big news, use the “Curtain Raiser.” The old PR trick of releasing information the day before the official launch can not only give useful indications of market reactions but, as in this case, allows the headlines to announce the big numbers on day one and stretch the news to a second day by providing more detail. Maximum publicity for the prosecution; as anyone knows, more is better than less.

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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