Fictional stories may have caused the French bank’s share price to plummet
UK newspaper The Mail on Sunday recently published an article saying that Société Générale (SocGen) was “on the brink of disaster.”
Two days later the paper retracted the article stating, “We now accept that this was not true and we unreservedly apologize to Société Générale for any embarrassment caused.”
The following day a French journalist at Reuters tweeted that The Mail’s story was caused by “a misinterpretation of a series of articles that appeared in Le Monde.”
The series referred to was available only to Le Monde subscribers and examined a possible collapse of the Euro. According to The New York Times, the 12 part story was clearly labeled as fiction but named real banks like Société Générale.
Speculation online and in various publications over the source of the story continued until eventually Le Monde defended itself in an article by senior editorial executive, Erik Izraelewicz.
The articles in Le Monde and The Daily Mail almost certainly contributed to uncertainty over Société Générale’s finances and the subsequent share price plunge.
This story demonstrates how contemporary media can allow an unfounded story to quickly escalate and the tangible effects that this can have on a company’s finances.
Risk managers need to know how to manage new media in order to mitigate this threat.