Last month’s comments by Frank Quattrone at a Silicon Valley conference are of ongoing interest for market watchers and communications professionals alike.
Now Entrepreneur Quattrone (formerly known as Banker Quattrone), who endured years of investigation over obstruction of justice charges (eventually dropped), argued that the enforced separation of investment banking from stock market research needs to be ended because it denies small companies access to research analysts and therefore impairs American competitiveness.
Current restrictions prohibit investment banks from paying analysts from investment-derived revenue or even allowing banker and analyst to speak without close legal monitoring. Mr. Quattrone believes that there are suitable anti-conflict guidelines that can be installed to ensure ethical practice under a more relaxed system, similar to what was previously in place.
It’s not surprising that this case (or “excuse,” depending on your point of view) is being made in the current down economy, and that the restrictions would seem, in retrospect, to have yielded unintended consequences. The bottom line is that, if investors aren’t getting what they need, the marketplace will suffer and slow down – and that’s not good for anyone.
But there is another dimension to the issue that is all about public communications and personal reputations. Mr. Quattrone is currently in rehabilitation mode and, to that end, he is creating a role for himself as a wise counselor who has seen and done it all. Positioning himself as a friend to a robust market and investors is a smart move.
Conversely, the rules he is criticizing were, you may recall, driven by one Eliot Spitzer, whose reputation cannot now be reclaimed.
Expect the messengers to therefore play a major part in determining the outcome of this critical discussion. Apart from the merits of their respective opinions, efforts to undo the alleged harm caused by the restrictions are being driven by a man on a personally self-interested mission – while simultaneously fueled because their creator is in no position to offer a defense.
Irrespective of how this issue eventually plays out, message and messenger have become one.
Larry Smith, Senior Vice President of Levick Strategic Communications, is one of the profession’s leading consultants on media strategy as it directly affects the marketing of legal services and the outcome of high-profile litigation. Mr. Smith is also a leading crisis communications consultant, working with C-Suite executives throughout the world on reputation management and brand protection issues.
