A deep rift was developing last night inside the financial public relations community, as several leading firms spoke out against calls for regulation under the Financial Services Act. A number of senior PR executives have written to Sir David Calcutt, chairman of the Takeover Panel, protesting at the view that PR firms are the weak link in the leaking of sensitive information to the market and the financial press.
"A lot of the comments of the past few days about the need for PR firms to be registered are out of line. This industry does not need to put its house in order; it has a tremendous record over many years," said David Wright, chief executive of Citigate.
He was among senior executives who said that financial PR was already subject to strict codes, and who expressed doubt that regulation would achieve anything.
They were reacting to a stiff warning letter from Sir David to all PR firms about the improper leaking of price-sensitive information, and calls from a few senior PR practitioners for firms to subject themselves to formal regulation as a way of reinforcing the profession's standing.
A heated debate has erupted since Financial Dynamics, one of the City's leading PR firms, has become embroiled in two scandals involving the leaking of sensitive information. After a public rebuke by the Takeover Panel, the company was sacked by its client, Amec, during the recent hostile takeover battle.
Some senior PR executives, like Brian Basham of Warwick Communications, and Anthony Cardew of Cardew and Company, have stepped up their campaign that the industry would be better off if properly regulated like other financial services firms in the City.
"I can only watch with amusement as some people get all pious and holier- than-thou about this issue," said Piers Pottinger, chairman of Lowe Bell Financial.
"I am very unimpressed by the whole argument. The people prosecuted in the City for wrongdoing are brokers, bankers, solicitors and accountants, not PR executives. I object to the Panel's assumption that all leaks come from PR."
Angus Maitland of the Maitland Consultancy said: "The regulations are there, the rules are very clear in the case of people not behaving properly. I do not think regulation will help."
Dale Fishburn of Fishburn Hedges, said: "There is a bit of a knee-jerk reaction going on. Recent events show self-regulation is working well. I cannot see what regulation would add."
The Takeover Panel is increasingly concerned by newspapers quoting sources close the company, which it believes are mainly PR leaks. "I think the Panel is being a little heavy-handed and hypocritical," said Mr Wright.
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