Finding calm in the storm: dealing with a professional crisis can be life changing

13 January 2022

“It’s very easy to find yourself in a really unpleasant situation when it comes to regulation and criminal enforcement in a professional context,” says Carl Newman, UK white collar crime partner at Withers. “If you make a mistake in your personal life, that’s clearly your responsibility. But in a business environment even though it’s not always under your control it can still be down to you.”

Carl, who leads Withers’ white collar defence and investigations team in London, has seen many people blindsided by allegations against them. In one recent case, an individual working in the construction sector was distressed to find themselves part of the inquiry into the Grenfell Tower fire, in which 72 people tragically lost their lives.

“The individual was working at a relatively junior level in the company and had no idea that their product was even involved. To suddenly be answering questions on the inquiry and to police was a complete shock because they’d had no authority over what went on within the company and had no control over the product itself.”

As is often the case in a high-profile scandal, corporate parties to the inquiry sought to argue that rogue individuals, rather than their employers, had been negligent. “This was a case that I felt strongly about,” says Carl. “Rightly, there are many people and organisations who must be held to account as the inquiry seeks the uncover truth and overhaul the system that allowed these horrific events to occur. The company involved sought to deflect culpability and without our help, this individual, could have been held wrongly accountable.”

Unfortunately, it can take time for professionals in crisis to realise that their interests have begun to diverge from those of their employer, says Chris LaVigne, a partner in the litigation and white collar defence and investigations teams in New York. “Most people don’t anticipate that a company can turn on them. This is somewhere they have earned money, made friends and built their reputation. For someone who is just doing their job, there is often no sense that something bad could happen.”

And yet bad things do happen, as in the case of a foreign exchange trader who had begun his career at a global bank straight out of high school. “Our client was a trader, doing what he always knew to be the way you traded in the forex world,” recalls Chris. “One day he was invited to a meeting and found himself sitting in front of a bunch of lawyers for the bank, all asking questions about rate rigging, and he didn’t have a lawyer with him.”

The trader lost his job and was unable to find a new one while being investigated by a government regulator. “We got him through that. But it took years and it was a trying experience,” notes Chris. “What kept him going was that his wife and family supported him. He loved being a dad and started coaching soccer, made friends in his community and managed to carve out a life and headspace separate from what was going on.”

UK financial services regulatory partner, Harvey Knight, represented a senior banker over an even longer period. Withers was consulted when a national newspaper reported that the banker had suppressed a report that showed wrongdoing at an overseas subsidiary. The banker’s case was that he had shared the information with his superiors and been exited as a result; his suspicion was that the bank had leaked false information to the newspaper.

“The problem was that it had been written in the press that he had covered it up, and what gets into press tends to become gospel,” says Harvey, who worked for many years at the Financial Services Authority (FSA) (the predecessor to the FCA). “Regulators read it, and it is difficult for that not to shape their approach towards you.”

With his UK reputation in tatters, Harvey’s client found work overseas while first the bank and then the FCA completed their investigations. “After seven years we cleared his name. He wasn’t banned or fined and could be approved to perform any function in a bank,” says Harvey.

However by this point, the individual had moved on to work in a different sector abroad. Following the stress of the investigation and the relocation, his marriage broke down. “There is a personal as well as a professional cost to going through something like this,” notes Harvey.

Speaking to the right lawyer at the right time is essential, particularly where there are regulatory issues. This may not be the first thought of an individual who has “never had so much as a parking ticket before”, says Harvey, but will enable them to get on the front foot, taking information to investigators or regulators before their reputation becomes tarnished.

Media and reputation partner Amber Melville-Brown has lots of experience of the risk of damaging or inaccurate information being made public. Partnering with colleagues across the legal spectrum, it is her role to protect the privacy and reputation of those facing allegations of anything from financial misconduct to sexual harassment, and to handle the sensitive communications around the issues. “You can’t put a value on your reputation,” says Amber. “Accusations of inappropriate conduct whether in our professional or private life go to the heart of our integrity, whatever our role. Our reputation is who we are, in the eyes of others.”

She points out that “professional allegations can harm a personal life, while personal matters can damage one’s professional reputation – the two are inextricably linked and cannot be looked at in a vacuum”. One respected financier was being harassed and threatened by a woman with whom he had had a relationship. “From the moment he woke up each day, he received messages from her threatening to make damaging allegations to his wife and children and business contacts,” Amber recalls. “He had suffered in silence for three years before seeking help. We spent three months carefully to assess and understand the woman’s mindset, in consultation with mental health specialists, and to create an approach that we felt had the best chance of achieving the desired result of a cessation of hostilities. Three hours after having sent our cease and desist letter, we received the confirmation we needed. Our client was able to rehabilitate and maintain his relationships and avoid the social media storm that might have occurred given his professional profile.”

While there is a tendency to assume that those facing damaging allegations or negative media reports must be ‘bad’ people, the Withers team’s experience is that things are a lot more nuanced. “We’re all human beings,” says Amber Melville-Brown. “People do make mistakes, bad choices. Or they fall victim to the actions of others and simply may be in the wrong place at the wrong time."

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.


Join the club

We have lots more news and information that you'll find informative and useful. Let us know what you're interested in and we'll keep you up to date on the issues that matter to you.