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April 30, 2013

Companies Dealing With Capital Markets Challenged By Online Reputation

by stevenwyer

Reputation Advocate stocks imageWith more than 10,500 financial service companies out there, professionals are more exposed than ever to the backlash of negative online reputation damage. When words such as “scam”, “fraud”, “thief” or “criminal” are even casually mentioned in the context of a financial services entity, the company almost always takes a hit to the bottom line.

These comments are not to be confused with information on sites managed by state agencies or federal government and regulator sites such as the SEC and FINRA. Nearly every state provides a site to file either a formal or informal complaint against those involved in financial services. Many of these sites provide online forms and even extend office hours for convenience. If services provided fall within the broad definition of insurance then each state has an insurance commissioner to oversee such regulated businesses.

The Financial Industry Regulatory Authority (FINRA) is the largest independent non-governmental regulator for all securities firms and representatives in the United States. FINRA provides a primary conduit for consumers concerned about financial fraud, misrepresentation impropriety. The agency oversees nearly almost 4500 brokerage firms, 160,000+ branch offices and approximately 630,000 registered securities representatives. Consumers can find online complaint forms or contact the agency directly by phone. The agency’s chief role is to protect investors by maintaining the fairness of the U.S. capital markets. The agency has more than 3,200 employees nationwide.

It is important to note that just because a firm has been reported, or a registered representative has been requested to provide information regarding a client or transaction, does not mean that these activities will initially be found online. The party being investigated can maintain its online reputation while resolution is negotiated.

The issue facing many consumers is the amount of time that it takes for the agency to investigate a report. FINRA is drowning in complaints relating to market manipulation. Consumers reach a level of frustration and are driven to find another outlet for their complaint. The amount of time and effort required to go through such traditional channels is simply not acceptable to most people.

The Securities Exchange Commission may be helpful if it is believed that criminal misconduct or securities fraud is involved. Again, the time and cost involved in such a process cannot deliver the need to quickly wrong the right. The use of an arbitration lawyer such as the one found at investmentfraud.pro may be able to mediate a solution, but again the cost and time involved is more than many people can afford.

At the end of the day, many people take the quick and easy route and simply log in to one of the hundreds of online complaint sites and file anonymous and often vile complaints against those they believe have wronged them.

A quick check on such sites as scam.com, pissedconsumer.com and investorscam.com will provide for hours of interesting reading. The challenge is that it is literally impossible to separate the abstract slander leveled by former employees and competitors from the legitimate complaints relating to real fraud and deceit. Original complaints are often followed by open comments that create a string of content recognized as having high authority by search algorithms. Even though a person with a less-than-scrupulous motivation may fabricate the initial complaint and all of the comments, the posting may increase in Pagerank and actually end up at the top of search results for the accused party.

The First Amendment provides for all forms of freedom in speech. This includes the types of content found on these unregulated and unmonitored complaint sites. The unfortunate reality is that thousands of individuals and businesses are damaged and they have no recourse available to them. And while a consumer had no voice a decade ago, the pendulum has swung to the other side and now all businesses and all professionals are finding the need to develop online reputation management and defense strategies. Financial service professionals and companies that are active in the capital markets can no long afford to manage business without a comprehensive plan in place to respond to wrongful online slander and attacks.

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