|April 21, 2010|
|Banks Wait for Next PR Shoe to Drop|
|By Greg Hazley|
|While Goldman Sachs goes through yet another PR beating in the wake of the SEC's April 16 fraud case, Wall Street communications teams (not to mention everyone else in finance) is left wondering who is next.|
"At its core, this issue with Goldman Sachs is much more than the case at hand," says Levick Strategic Communications senior VP Michael Robinson. "It is a reminder that the blame and recrimination from the 2008-2009 economic meltdown is far from spent. It is a clear warning shot across the bow of a wide array of other financial institutions that they could be next."
CNNMoney reports that the Goldman case is just the tip of the legal iceberg. "Given the sweep of problems that came out of the financial crisis, the broad swath of institutions involved and the level of losses and anger, you would think there would be additional actions forthcoming," a business school dean and professor told CNN.
Wall Street is radioactive right now. Even Columbia University alum and Citigroup chief Vik Pandit is getting grief from students at his alma mater as he is slated to be a commencement speaker at the School of International and Public Affairs in May.
"It doesn't fit into the spirit of what public affairs is supposed to be," one student told the N.Y. Daily News about a speech by Pandit, who is a trustee of the university.
That backlash comes after Citigroup swung to a $4.4 billion profit in the first quarter but remains a ward of its one-third owner, Uncle Sam.
But if big banks are trembling in the wake of the Goldman case and looming financial reform in D.C., some independent and smaller institutions could be ready to benefit.
The Wall Street Journal noted one money manager has already called on about 10 Goldman clients since the case was announced. A former SEC enforcement attorney told the paper: "There's almost a natural circling of the vultures."
Another beneficiary is the Obama administration. The timing of the SEC case couldn't have been better as the White House pushes Congress toward reforming the financial sector.
Bloomberg reported this week that the DNC is linking key word searches about the Goldman case to its push for regulatory reform.
“Help Pres. Obama Reform Wall Street and Create Jobs,” the ad copy says when a Google user searches "Goldman Sachs SEC."
Of course, as a Pew Research Center report found this week, the only institution with a more battered reputation than government is the financial industry.
As CRT/tanaka's Mike Mulvihill put it, "With all that anger floating around, it really does suck to have a big target painted on you like Goldman and Wall Street now do."
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