When the Securities and Exchange Commission recently charged three former senior executives of IndyMac Bancorp with securities fraud for “misleading investors,” two fundamental questions immediately arose in investor relations and strategic public relations circles: Did they have professional IR/PR counsel when communicating with investors?
Contrary to popular and misguided belief, the professional practice of investor and strategic public relations isn’t about painting rosy pictures, making things appear better than they really are, or coloring fact. Rather, best-practice counsel condones transparency, clarity, and timely, factual representation of corporate news–good or bad.
The corporate executives at IndyMac are accused of making false and misleading disclosures about their company at a time when its financial condition was rapidly deteriorating. Perhaps in time, we’ll learn if they were counseled by IR/PR pros or not.
As Lorin L. Reisner, deputy director of the SEC’s Division of Enforcement, said in a statement, “Truthful and accurate disclosure to investors is particularly critical during a time of crisis, and the federal securities laws do not become optional when the news is negative.”
We and our fellow professional communications brethren couldn’t agree more with Reisner. These IndyMac Bancorp officers now need legal representation.
Ironically, communications counsel is crucial more than ever, since the fight will continue in the court of public opinion, as the executives look to prove their innocence and reestablish their careers.
To many outsiders, this could sound like a job for a (spin) doctor. The truth is that IR and PR pros, many of whom– yours truly included–began their careers as journalists, abhor the notion of spin, including the word itself. There is no cure-all medicine for managing a crisis. Only solid thinking and communications skills will win the day; certainly not a job for a doctor of spin.
— Roger Pondel, firstname.lastname@example.org