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Financial Communications

The PhDs of Financial Scandals: Power, Hubris and (Billions of) Dollars

Citibank Game Final2Current financial scandals may be more complex and less glitzy than Wall Street crimes of the 1980s, but they involve similar underlying factors, according to two noted authors. Power, influence, egos, and hordes of money still play significant roles. Wolves still prowl Wall Street these days, though their fur has changed.

Bryan Burrough, co-author of Barbarians at the Gate: The Fall of RJR Nabisco, and William D. Cohan, author of Money and Power: How Goldman Sachs Came to Rule the World, spoke at a Museum of the City of New York event earlier this month to discuss changes in Wall Street culture and offer comments on the evolving cast of characters.

Press Coverage and Politics:
Press coverage has been hindered by complex “Wall Street jargon”, said Cohan. Financiers “created a black box so that fewer reporters can cover the subject since terminology is so foreign.” Financial reporting isn’t an area that can be easily added as a specialty.

The political climate also factors into today’s situation. “The public resents that bankers got bailouts for problems they caused and everyone else got bupkis”, said Cohan. He lamented the “symbiotic relationship between government and Wall Street and the revolving door” of former government officials joining financial firms.

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Which Word Best Captures Epic #AskJPM Fail: ‘Evil’ or ‘Satan?’

That, ladies and gentlemen, was a social media disaster for the ages. In an apparent attempt to connect with the common man, JP Morgan Chase announced an “online discussion” with vice chairman Jimmy Lee that was supposed to occur today before things very quickly went to…well, you know:

Who knew social media “engagement” isn’t always a good thing? In a show of just how poorly planned this event turned out to be, “evil” and “Satan” were two of the terms most commonly used in tweeters’ super-earnest questions.

We feel you, bros—but we also prefer a little more subtlety in our critiques. Some favorites after the jump.

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PR Industry Growing Despite Weak Economy

Encouraging news on a dreary Monday in New York City: the American PR industry is doing quite well, thanks. According to a study released by management consulting firm StevensGouldPincus, our business is expanding at a healthy rate even as the larger economy struggles to return to pre-recession levels for all but the richest Americans. Seems like more and more businesses are itching to discover what, exactly, public relations is all about.

Details:

  • The industry at large grew at 8.2% in 2o12
  • Operating profit grew from 18.2% to 18.8% despite billing rates remaining the same
  • Edelman was excluded from the study because the firm’s results skewed averages
  • The fastest growth occurred in the Southwest, Southeast and Northern California, proving that you don’t need to live in New York or L.A. to make it big in PR

These findings confirm the latest Holmes Report ”World PR report“, which found the industry to be growing 8% globally.

Some caveats:

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Swiss Banking Industry Offers Shockingly Sincere Apology for Tax Shelters

The hills are alive with the sound of groveling

Swiss bank accounts are kind of like steroids in sports: lots of ridiculously wealthy people use them and everybody knows that these people use them, but they’re still a big no no. We joke about how they’ve become such a regular part of the national conversation, but any connection to them becomes a PR liability for big-name clients. Just ask Mitt Romney.

For this reason, we find ourselves amused by the incredibly earnest apology issued today by Patrick Odier, a spokesperson speaking on behalf of the entire Swiss banking industry. He wants to let the world know that his clients are very, very sorry for encouraging Americans to avoid paying domestic taxes on the money that they worked so hard to earn (if by “worked so hard” you mean “established high-yield savings accounts”). Here’s his explanation:

It was not because we lacked skills and knowledge that we found ourselves in these unfortunate situations. It was because we acted wrongly and we displayed wrong conduct. I regret this all the more because we have damaged the reputation of the entire Swiss financial center.

Yes, this apology came after Switzerland’s decision to (begrudgingly) assist the U.S. in identifying tax cheats, and that came after a lengthy investigation that forced the nation’s oldest bank to close and threatened to wreck the industry’s credibility. But Odier sounds downright masochistic here. Have any crisis comms pros ever witnessed such a self-effacing apology?

Merrill Lynch Settles Largest Racial Discrimination Suit in History

Could there be a less fortunate day on which to announce the settlement of the largest racial discrimination suit ever filed against an American employer?

That’s a no. The 50th anniversary of Martin Luther King Jr.’s March on Washington brings news (technically released last night) that big boy Wall Street brokerage firm Merrill Lynch finally settled the class action suit filed by more than 700 black brokers approximately eight years ago. The total of $160 million, to be divided among affected individuals who’ve worked with the company since 2001, stands as a confirmation of allegations that managers ignored the concerned parties, who were “ostracized by co-workers” and essentially forced into “poor producer” status.

Lynch’s first black CEO, E. Stanley O’Neal, even admitted that black employees rarely got the best work. Why? Because most clients were white and “might not trust” brokers who weren’t.

Wow. That’s what we call “a cultural issue”, not to mention a massive PR problem.

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“The Man With the Gray Wavy Hair”: George Sard Has His Moment in the Sun

It’s hard to prove that something hasn’t happened because of your efforts. But a lot of high-powered Wall Street types are quick to thank George Sard and his PR firm Sard Verbinnen for all the stories  that don’t get written about them.

Both Sard and Verbinnen (Paul is his first name) declined to comment, but Bloomberg Businessweek wrote a profile that names the following clients: SAC Capital Advisors, Dell and Air Products and Chemicals (both involved in multi-billion-dollar deals), and Goldman Sachs’ Fabrice Tourre. The quote in the headline comes from the story, which says “the man with the gray wavy hair” was virtually the only person in the courtroom during Tourre’s trial not to get any media attention.

For its efforts, the article notes that the firm is the number one M&A firm by deal count, according to Mergermarket, “lending its expertise to 45 transactions worth $71 billion in the first half of 2013.”

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Score That Job: Dow Jones

If our recent Cubes episode giving you an insider’s look at Dow Jones and The Wall Street Journal made you think about working there, here’s your chance to find out how to make that happen.

Vicki Salemi, mediabistro’s very own career expert, author and editor sits down with Meredith Lubitz, vice president of Talent Acquisition at Dow Jones to hear what it takes to go from candidate to employee.

A couple of hints? Who you are outside the office is just as important as who you are inside. So tighten up that social media presence. They want to know what you’re saying to the world.

You can view our other MediabistroTV productions on our YouTube Channel.

BusinessWeek Condescends to Millennials, Creating PR Blunder for the Centuries

BusinessWeek recently launched a PR campaign named “Gets You Ahead” that targets the Millennial demographic. Smart move. Publications covet younger readers because the demographic represents potential decades of loyal customers and subsequent financial windfall. BusinessWeek embraced this simple PR concept, then dragged it out behind the woodshed and beat it with a phone book.

Incredulously, BusinessWeek decided the best way to woo Millennials was to belittle them by characterizing the generation as lazy deadbeats who love financial debt and living with their beleaguered parents. This absurd campaign even allows parents to send their children e-cards with crass comments such as “Our American dream is for you to move out” or “I moved out of my parents’ home after college. So it’s not genetic.”

You know what also isn’t genetic? Self-awareness. We’re guessing the parents who see the humor in these e-cards are the same ones who fight the referees at their 6-year-old’s basketball games. The entire campaign lacks perspective, tact and decency. There is nothing funny about unemployment at any age—really BusinessWeek, you didn’t know this?—but it’s uniquely difficult for industrious young people because their professional lives are passing by too. This recession has been a tragic waste of human potential on every level. Oh, and for the record, the Millennials had nothing to do with the current economic mess.

Perhaps the e-cards featured in BusinessWeek’s “Gets You Ahead” program should offer more accurate and self-aware comments such as “Sorry the older generation was so greedy and financially irresponsible for the past 40 years. Boy, what a mess. Anyway, glad you’re home.” or perhaps “We’re shallow and judgmental and obsessed with the approval of our neighbors, so you must move out. You’re embarrassing us. Find other ways to save money and pay off your insurmountable student loans.”

BusinessWeek should stay out of the comedy business. It clearly isn’t their forte.

Paul Tudor Jones Apologizes for Controversial Comments About Working Mothers

Billionaire hedge-fund manager Paul Tudor Jones, head of Tudor Investment Corp. and founder of charitable organization the Robin Hood Foundation, found himself in hot water last week after he told an audience at the University of Virginia that he thinks it’s difficult for mothers to be successful macro-traders because having a baby is such a distraction for women, calling motherhood a “killer” of the desire to trade.

If that weren’t cringe-worthy enough, his word choice was even more unfortunate: “As soon as that baby’s lips touched that girl’s bosom,” he said, “forget it.” Yikes.

After social media and the blogosphere erupted with angry responses and heated debates, Jones released the following statement last Friday, which explains that he did not intend to make a blanket statement about working mothers, and — as mea-culpas given in response to cries of chauvinism often do — assures the public that he has real human relationships with living, breathing females by reminding us that he has three daughters: Read more

Top Bankers ‘Accept’ Pay Cuts. Will the Public Forgive and Forget?

You don’t have to be a public relations expert to know how the public feels about the banking industry. We hate it–like “record low” opinion polls hate it. In fact, we hate all of it—from hidden banking fees to that one time when banks almost destroyed everything good on the planet with their greed, obfuscation and wildly irresponsible practices.

And then there are those financial industry executives and their astronomical multimillion dollar salaries and bonuses. (There’s an app for that, by the way. It claims to compare bonuses for execs at the world’s biggest banks, and it can be yours for the appropriately inflated price of $11.99.)

The public doesn’t have a problem with people acquiring wealth through diligence, intelligence and sweat equity, but we loathe watching the economy sink into a financial abyss while those in charge shop for their own private islands.

Ever since the early days of the recession, the public never fully understood how people doing such a terrible job could be paid so handsomely. There appeared to be rules at play that don’t apply to the rest of us. Finally, however, the situation is changing. That’s right. Jamie Dimon, chief executive for JP Morgan Chase, had his salary cut in half, to a mere $11.5 million. Good to know he avoided that potential PR disaster.

How will this “pay cut” campaign go over?

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