How far will Wall Street types go to protect the criminals in their midst? The answer is pretty darned far, even when the crime in question is documented child abuse.
That's the take-home lesson from my recent conversation with Paula Poskon, of Robert W. Baird and Company. Baird is an underwriter for the $380-million IPO that Campus Crest Communities and CEO Ted Rollins completed in late 2010. In her role as an analyst, Poskon covers the Campus Crest stock, so I sought her out for comment about the ugliness in Ted Rollins' past, which includes a conviction for assault on his 16-year-old stepson and a social-services investigation, based on a citizen complaint about possible sexual abuse of the same stepson.
My primary question was this: How do investors react when they learn that a CEO has a criminal history, especially involving abuse of a child? Poskon apparently made the mistake of giving an honest answer. She first responded by saying, "Oh, my God, I was not aware of any of that." She vowed to research the matter and said investors would find the issue "very concerning," especially since Campus Crest's market, as a builder of student housing near college campuses, is young people.
Poskon's research apparently did not get very far before someone tried to strong arm her into backing off what she had said. In a followup conversation with me, Poskon went to rather extraordinary lengths in an effort to get me to not use her comments--especially when you consider that she regularly is quoted in the press, including such prominent publications as The Wall Street Journal. (See video at the end of this post.) Here is one of our exchanges:
Paula Poskon (PP): I don’t want you to quote me in any of your articles on this particular situation because I’m not equipped to say anything meaningful. It’s sort of like a blank chalk board. I just don’t know.
Roger Shuler (RS): I can’t go there. We did an interview, and I want to use your quotes.
And then we had this:
PP: You haven’t even told me in what capacity you want to quote me. . . . I’m trying to be as open and factual as I can be, but I would like that same respect in return. I’m not equipped to be quoted on this situation because I'm not knowledgeable enough about it.
I'm quoted in The Wall Street Journal, and the normal course of action is they will send me the quote they intend to use and ask if it accurately reflects our discussion or if there is something that needs to be changed.
RS: We had an on-the-record interview and I’m going to use the quotes. I did say I would hold off while you researched this, but it sounds like your research is pretty much finished.
Poskon must have been desperate to have her quotes canned because she was resorting to utter nonsense here. I told her in my initial e-mail who I was and where I was based, that I was a journalist writing at a blog and several national Web sites, and I was interested in Campus Crest Communities--in part because it has a number of projects in Alabama, including a brand new one at Auburn University.
The capacity in which I wanted to quote her should have been clear. If it wasn't clear, she had plenty of time between the scheduling of the interview and our actual conversation to do a Google search on my work or ask me directly about any questions she had.
Poskon also is misinformed about the "normal course of action" regarding journalists and the use of quotes. If The Wall Street Journal runs quotes by her for approval, that's fine, but it hardly is standard practice in journalism--and I've been in the field for 30-plus years. Also, Poskon wasn't seeking to verify the accuracy of her quotes; she was seeking to have them scrapped. There never has been any dispute that the quotes I gathered were accurate.
Eventually, we returned to the subject of research on Ted Rollins' past--and it appears that was "research" Poskon never intended to conduct. She also misconstrued the nature of my interview request. I never asked her to verify the information about Ted Rollins' criminal history; I already had that. I asked for her views on how the investment world views such information. She gave me an honest reply, but that must have made someone in her chain-of-command uncomfortable, especially given the clout that the Rollins family has on Wall Street:
PP: Will I keep trying to learn about it and find out what I can? Of course. But I'm not in a position to comment on this specific situation without doing my own research. And I’m not in the position of putting a finite timeline around having that happen.
RS: I didn’t expect you to comment on specifics or do an investigation because I already know . . .
PP: But I’m not in a position to comment on what you know. . . . To quote me specifically about Mr. Rollins or Campus Crest, in the context of his personal life . . . I don’t know. I can’t comment on something when I don’t know about it.
RS: You did comment, though, on how investors might see this. We talked about the fact it involved young people, and that’s relevant. It was on the record, and I’m going to use it.
Is Poskon being disingenuous when she claims that she can't comment on wrongdoing that she knows nothing about? Yes, she is. I told her that I had written extensively about Ted Rollins and offered to send her links to several key posts. She encouraged me to do that, and the material included embedded public documents that prove Ted Rollins' criminal history in black and white. Poskon acknowledged that she had read the posts, but then proceeded to claim she knew nothing about the matters at hand.
Clearly, Paula Poskon did know about the matters at hand. She just did not want to be quoted honestly and accurately about them.