Crisis - Mahony Partners

Jul

2012

Putting a Face on Facebook

Facebook users were up in arms recently after the company replaced the email address that appears in their profiles with an “@facebook.com” address. The response was swift and negative, with Facebook fielding a raft of harsh comments in the media and across the blogosphere. Facebook responded with a brief statement distributed by email from an unnamed spokesperson. Adding a real name to the statement would have been more effective. (more…) Read More

Jul

2012

Reflections on Bob Diamond

Crisis, Financial Services

For the Barclays bankers who were fomenting a revolt to topple Bob Diamond earlier this week, the scene must have seemed eerily familiar. Most of them are veterans of Lehman Brothers, which Barclays acquired in 2008 following its collapse under Dick Fuld, the strong-willed executive who ran the firm for 14 years. Diamond, like Fuld, built an investment bank virtually from scratch and ran it with absolute authority, yet was deaf to criticism and blind to the forces that weakened the institution and ultimately sank his leadership. Read More

Jul

2012

Possibly the Worst CEO Letter Ever

Crisis, Financial Services

On Monday, Barclays CEO Bob Diamond sent a letter to employees that he hoped would draw a line under the widening scandal over the bank’s manipulation of a key lending rate. But rather than relieve the pressure, the letter only increased it, and by Tuesday Diamond had resigned. His letter offers several lessons for scandal-scarred CEOs. (more…) Read More

Jun

2012

Did John Thain Really Say That?

Crisis, Financial Services

John Thain, the CEO of CIT Group, recently was honored by a Manhattan charity and had some interesting things to say about public perceptions of the financial sector. (more…) Read More

Jun

2012

Never Blame the Risk Model

Crisis, Financial Services, Taking & Managing Risk

Federal regulators released a report about what caused the San Onofre nuclear power plant in California to leak radioactive steam in January. It said excessive wear caused steam tubes at the plant to rupture – an event that “had never been seen before,” according to a federal official, and hadn’t been anticipated by the manufacturer’s computer model. Faulty computer models aren’t confined to the world of nuclear power, of course. Just ask Jamie Dimon. But it’s the managers - not the models – that must shoulder the blame when things go wrong. Read More

Jun

2012

Handicapping the Rajat Gupta Verdict

Crisis

The insider-trading case against ex-McKinsey boss Rajat Gupta is now with the jury. From the beginning, this looked like a clear case of wrongdoing, but I believe there’s a good chance he’ll go free. (more…) Read More

Jun

2012

Withholding Judgment on Kleiner Perkins

Crisis, Financial Services, Media

Allegations in a lawsuit are not facts, but they still can dent a company’s reputation. So Kleiner Perkins likely has suffered from the media attention around the sex-discrimination suit filed by Ellen Pao, a partner at the firm. But its bad press is not a fatal blow. (more…) Read More

Jun

2012

Three Lessons from Jamie Dimon and Bob Greifeld

Crisis, Financial Services

Jamie Dimon of J.P. Morgan and Bob Greifeld of Nasdaq OMX share several things in common. Both presided over colossal blunders at their firms – a multi-billion-dollar trading loss at J.P. Morgan for Dimon, and a systems breakdown on the closely watched Facebook IPO for Greifeld. Both Dimon and Greifeld have thus far offered only general descriptions of what went wrong. Both are facing tough scrutiny from investors and regulators, with the possibility of legal action, and both executives are still unable to tally the full cost of the mishap to their institution. And yet for all these similarities, Jamie Dimon is today the stronger executive. Read More

Jun

2012

Volatility in Unexpected Places

Crisis, Financial Services, Media

In case you missed it, the FT’s Gillian Tett had a great piece yesterday on the emergence (or perhaps the re-emergence) of risks that are hard to quantify but have a very powerful effect on the markets: (more…) Read More

May

2012

The Facebook IPO Trainwreck

Crisis, Financial Services

No one is covering themselves in glory in the aftermath of the Facebook IPO. Lead underwriter Morgan Stanley is battling allegations that it priced the deal too richly. Facebook insiders are being called greedy for the last-minute increase in the number of shares they sold in the offering. Facebook’s management is being criticized for signaling analysts to lower their revenue estimates just days before the deal priced – ... Read More