8 Reputation Management Dos & Dont's When Trying to Recover From an SEC Press Release Here are some reputation management tips to facilitate a speedy recovery in the wake of an SEC press release.
By Ryan Blanch Edited by Chelsea Brown
Opinions expressed by Entrepreneur contributors are their own.
Fund managers, and corporate leaders in other SEC-regulated industries alike, are all too aware that it's only a matter of time before they cross paths with the U.S. Securities & Exchange Commission. When the SEC brings an action, they often write up a press release that is published on their website. Although the cases have not yet been decided, and the target companies are in the midst of defending themselves (and very well might prevail), the press release itself is enough to cause a rapid, large scale, investor exodus.
Exacerbating the problem are the media outlets that, always looking for quick and easy content, rewrite the press releases with clickbait-esque titles designed to evoke a sense of something ominous looming just over the horizon. The SEC itself has become surprisingly adept at this as well in recent years, especially for a white-shoe government agency.
Related: 4 Common Assumptions About Online Reputation Management That Are Totally Wrong
Word of the SEC enforcement action travels at light speed throughout investor populations. In the investment world, trust is paramount. And all it takes to vitiate even the most established and trusted brand name is to place just two little words before it: "SEC Charges ..."
For the days, weeks and months to follow, any time an investor, or prospective investor, Googles that company, the accusation of wrongdoing is front-and-center in the search results. For most investors, it's simply not worth the trouble to consider the facts or to even read the entire article. The mere possibility that something less-than-kosher is afoot poses too much unnecessary risk.
Here are some reputation management tips to facilitate a speedy recovery in the wake of such a press release:
Do: Draft a holding statement that is vetted by your PR & legal teams that preempts a lot of investor questions. Your sec defense counsel might be reticent to do this for several reasons. But it can be done in a way that does no harm to the defense while appeasing investor concerns.
Don't: Go off-script when communicating with investors. That holding statement has to be the only statement used in answering investor questions. Every client-facing person in your company must have that script and use it as talking points, whether on the phone or via email. Better yet, if feasible, appoint a communications tzar to whom all investor questions on the subject should be directed. This prevents inconsistent messaging.
Do: Launch a positive PR blitz about everything else that is happening at your firm. Negative news is often pinned to the top of the search results because of the absence of any other content or news being published about your company. Now is the time to pen that article about your company's recent expansion into energy markets and the new interactive client portal rollout.
Don't: Engage in traditional PR tactics. It's time to call your public relations agency and tell them to pause all activity. You aren't eligible for prime time right now. And that story your PR agent has been pitching the press about your new ESG auditing and reporting program is only going to get more journalist eyeballs on your company. And, best case, they write about your ESG program but also cover the SEC enforcement action. The more likely case is that they pass on the article altogether or write an article entitled "SEC Charges ..."
Do: Launch a recruiting website, fast: www.AxeCapitalRecruiting.com.
Don't: Be defensive or attempt to litigate the accusations in the press, on your blog or anywhere else for that matter.
Do: Engage an SEO team to power-up pre-existing articles and websites that are currently on page two of Google for searches containing your brand.
Do: Try to be the first to break the news to your investors and clients. Inform all of your investors about the SEC action in a statement that describes what is underway and what it means for them. This can start with the holding statement described above, and should be updated frequently with material developments. These updates should be accompanied by other, unrelated, relevant and positive events.
Related: 7 Ways to Recover After a Reputation Crisis
To be clear, the goal here is not to hide the news from investors or prospective investors. It's quite the opposite. You want to be the first to inform and the first to update. To that end, there is no reason why the negative content should be found on Google if the news is to come from you. The vast majority of searches never make it beyond page one. If you act swiftly and effectively, you can control the story rather than your adversary.
Companies would be wise to build up their reputational armor well in advance of an SEC action. Planning ahead for unexpected bad news can ensure that headlines starting with "SEC Charges ..." never make it to the top of the search results in the first place — as there is too much positive content already competing for that real estate. Bad news loves a vacuum. So, be prolific and proactive.
