Never Having to Say You’re Guilty

When the worst happens, you’re on your own.

You must define the terms of the debate.

The public never really trusted Wall Street. That relationship went from bad to worse in the economic meltdown of 2008. Many were angered that bankers blamed for causing the crisis lined up at the public trough to be bailed out. What rankled more was that even in the few instances when fines were levied, no one was required to admit guilt.

It was a well-rehearsed dance. If Wall Street were caught doing something inappropriate, they’d disgorge a fraction of their profits in that case (which didn’t include profits from other cases the regulators didn’t catch). They’d promise to sin no more. But that was all.

 

Too big to fail? Some believed that translated into too big to jail — and that bred a sense of impunity.

That barrier is crumbling. Regulators are becoming more aggressive. The latest big fish caught in the net is SAC Capital Advisors, a hedge fund run by billionaire Steven Cohen. In its settlement, SAC reluctantly admitted insider trading, agreed to pay a $1.2 billion fine, and was barred from managing money for outside investors.

It was the first guilty plea involving a major Wall Street firm in a generation, since junk bond king Michael Milken of Drexel Burnham Lambert pled guilty to securities fraud in the 1980s.

Meantime, regulators are near a massive settlement with J.P. Morgan Chase, but negotiations reportedly are hung up in part on whether there will be an admission of guilt. Regulators are loathing to let the company skate, but the financial giant is pushing back hard.

 

Most mortals don’t enjoy the luxury of such heft.

Comparatively, they and their organizations are smaller fish with less leverage and few options.

They’re on their own and are less likely to escape unscathed, whether they’re being investigated by the government or litigating a business dispute. Or defending themselves against allegations of environmental damage or safety lapses.

It’s up to them to protect their reputation from being sullied.

Job #1: Seize control of the situation and define the terms of the debate. There’s a better chance they’ll be able to tell their story on their terms.

 

Gillott Communications is a Los Angeles-based public relations firm that specializes in high-stakes Crisis & Reputation Management with more than 50 years of expertise in strategic communications, corporate public relations, and working with the media.

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