What every CEO should consider before going rogue

FTX  founder Samuel Bankman-Fried reminds communicators to discourage leaders from speaking out in the middle of a  federal investigation.

Lessons about when to stay silent from the FTX founder

A half hour into the interview, reporter Andrew Ross Sorkin asked a question that prompted laughter in the audience at The New York Times DealBook Summit.

“What are your lawyers telling you right now?” Sorkin asked Samuel Bankman-Fried, the 30-year-old founder of the bankrupt cryptocurrency exchange FTX Trading. “Are they suggesting this is a good idea for you to be speaking?”

“They are very much not,” replied Bankman-Fried as the laughter grew louder. “The classic advice, right? Don’t say anything. Recede into a hole.”

We don’t know why Bankman-Fried ignored the conventional wisdom of crisis communications. But the interview presents an opportunity to review some of the factors any executive should weigh before taking a similar gamble.

If anyone was going to ignore the classic advice, Bankman-Fried did as good a job as possible. Which doesn’t mean he’s not going to pay for it in the long run.

Bankman-Fried gave the livestream interview on Nov. 30, 2022, less than three weeks after he resigned as CEO of FTX and the company filed for bankruptcy along with a related trading firm, Alameda Research, and nearly 100 subsidiaries, in what many consider the largest financial scandal since Bernie Madoff in 2008.

FTX may owe money to as many as 1 million people and companies, according to the bankruptcy filing. The 50 largest creditors are owed nearly $3.1 billion.

No formal allegations of fraud have been levied against Bankman-Fried, although federal law enforcement authorities are investigating him. Yet FTX’s new CEO, who has overseen some huge bankruptcies, including the collapse of Enron in the early 2000s, issued a scathing report on Nov. 17.

“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” John J. Ray III wrote.

Is it any wonder the lawyers said no?

And they apparently said no many times. Bankman-Fried never stopped talking after the company’s crash, Politico noted, including exchanging messages with a Vox reporter who is a friend.

He had previously agreed to the DealBook Summit interview, which was quickly followed by interviews with Good Morning AmericaBloombergCrypto Banterfreelance crypto journalist Tiffany Fong and The Wall Street Journal. It seems that if you were a media outlet wanting an interview, all you had to do was check Bankman-Fried’s Calendly.


What’s the downside? 

The worst case is when clients lie in a media interview, blinded by a passionate belief in their innocence.

Even someone trying to tell the truth may make mistakes, which can look like lies later. In a case as complex as the still-unfolding collapse of FTX, it is very difficult (maybe impossible) to get every fact right.

Bankman-Fried tried to protect himself by emphasizing that his answers were based on what he knew on the date of the interview. He also tried to cut short any inference about what he knew before the collapse.

“I can only talk about it from what I know and from what I knew,” he told Sorkin, according to a transcript. “A lot of this is reconstructing it over the last month. I have limited access to data.”


What’s the upside?  

Media strategy should have an objective, by definition. The purpose of litigation public relations is to affect the outcome of a case or its impact on the client’s reputation, James F. Haggerty writes in “In the Court of Public Opinion.”

His interviews won’t sway the decisions of the hard-nosed criminal prosecutors, securities regulations or creditors’ lawyers who are building cases against him. Maybe there’s a creditor or two with a soft spot for the fallen entrepreneur.

Perhaps Bankman-Fried thinks he’s softening the damage to his reputation by appearing forthright. One shouldn’t discount the likelihood that the interviews make Bankman-Fried feel better.

He explained why he ignored his lawyers’ advice by saying that not talking is “is not who I am. It’s not who I want to be.”

He continued: “I think I have a duty to talk to people. I have a duty to explain what happened. And I think I have a duty to do everything I can to try and do what’s right.”


What’s the message? 

In his interview with Sorkin, Bankman-Fried did his best Brenda Lee impression from 1960.

“I am deeply sorry about what happened,” he said. “Clearly I made a lot of mistakes.”

His other message was, “I didn’t know exactly what was going on.”

Looking at it from the outside, Bankman-Fried’s only defense may be ignorance. You may think Bankman-Fried was incompetent, but as he put it, he “did not ever try to commit fraud on anyone.”


Will the executive stay on message? 

Once the risks and benefits have been weighed and the message determined, the last step is predicting how the executive will perform in the heat of the interview.

How tough is the interviewer? What’s the format? For example, a single-take interview in front of an audience, like the DealBook Summit, can limit the questioner’s ability to pin down the subject. A recorded interview allows the questioner to home in on a single topic with repeated questions. Is there time to conduct practice interviews?

Despite his age, Bankman-Fried is a media veteran, although he never had to give any interview as tough as the one by Sorkin. How did he do?

Vox called the DealBook interview a “riveting train wreck.” Bankman-Fried was “notably fidgety, hemmed and hawed over his answers, and seemed at times to martyr himself,” the news outlet said.

But billionaire activist investor William Ackman, CEO of Pershing Square Management, offered a different perspective.

“Call me crazy, but I think @sbf is telling the truth,” he tweeted.

Bill, you’re crazy.


Among his many duties at Ragan Consulting Group, Senior Consultant Tom Corfman works in litigation PR, where he meticulously advises clients on what to say, how to say it and when to stop talking. Schedule a call with Kristin Hart to learn how we can help you improve your visual communications effort with training, consulting and strategic counsel. Follow RCG on LinkedIn and subscribe to our weekly newsletter here.


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