PR Communication Memo
Due to the current situation within our company, we are required to issue a public notice regarding the resignation of our CFO. There are rumors of financial irregularities surrounding this resignation. We need to address these rumors within our public notice in order to calm stakeholders and to minimize damage within the media.
The SEC has begun investigating out accounting practices, particularly in the area of revenue recognition. SEC investigations are confidential, so we are not required by law to disclose any specific information as of yet. However, the Freedom of Information Act allows release of certain investigation materials to individuals who may begin speculation regarding proceedings. Often such speculation is anonymous and occurs on the internet.
The SEC has also made it clear to us that any information obtained during an investigation may be released to law enforcement agencies or to congressional offices. These entities are not subject to the same confidentiality level as the SEC. We must also be aware of potential leaks of information to the media.
Legally we are required to alert stakeholders if there will be a revision of financial reports. However, even if such revisions have yet to be determined, it is still to our advantage to make stakeholders aware of issues surrounding the current situation. This disclosure of information may prevent overreaction. We are obliged to provide complete information that is material to the situation, so we must ensure the information we release is concrete and specific, not speculation.
The way we handle communication regarding this situation will greatly affect our company’s reputation. If we are perceived as being dishonest or withholding information, it may take quite some time to improve this perception. Public opinion can affect our stock prices both domestically and internationally. We need to be vigilant when communicating with the public via press releases in order to...