Private Lives and Prying Eyes

Managers must take control of social media

Originally published in the November | December 2014 issue

The last 15 years have witnessed a monumental shift in the public perception of hedge funds and those who manage them. What was once an industry anonymous to the majority now increasingly finds itself in the spotlight − for both the right and wrong reasons. Who are these people? How are they making the kind of money being talked about? What are they doing with their vast amounts of wealth? Mystery has given way to intrigue in the 21st century.

For those on the outside, life as a hedge fund manager seems easy. A life of risk taking, fast living and significant financial gain. But life in hedging isn’t straightforward; it involves long hours, family sacrifice, huge stress and no guarantees. And yet it’s a job that you enjoy and in which you excel. It is therefore no wonder that those behind the funds are often caught off guard by the intrigue and intrusion that has built up in recent years, and with the UK general election and the start of the US presidential primaries just around the corner, hedge funds are likely to come under the microscope.

Cash for favours and political donations are hot topics at the moment, and with politicians on both sides of the Atlantic on a war footing, 2015 is going to be a sensitive time for businesses and hedge funds. With the lines between old and new media blurring, prominent individuals – in particular hedge fund owners – are starting to experience a new threat to reputation, whereby materials published on social media are assumed by the media to be acceptable for publication.

For example, imagine you attend a political fundraiser and another guest photographs you and shares it on their Facebook page or Twitter feed. The media then get hold of the image and suddenly you’re ousted on page six of a national tabloid. Unfortunately, in this day and age, a simple dinner can become a public discussion. We in the West are very good at knocking down successful people, and social media has only increased this. It seems nowadays that you can’t support a cause without an ulterior motive. Nothing is taken at face value anymore, and people try to find the bad in everything.

Already there is speculation out there about “cash for favours”. In the UK the Labour Party is threatening to abolish the so-called stamp duty exemption for hedge funds, so any donation to the Conservatives is bound to raise questions of motive and self-interest. Perhaps it doesn’t matter what people think of you, but it becomes particularly important when your family’s privacy is affected. Why should details of your children’s activities become public just because the press want to know more about your background? Why should details of your bonus be public or details of where you live or where you take your holidays?

The law does and will protect your and your family’s privacy, but it is up to you to keep it private in the first place, and not expose yourself to attack. Once you make private information public, then it is usually up for grabs by anyone.

There are things you can do to protect your privacy and to keep your home and family life private. This does not mean going to ground, but instead making a distinction between home and family life:

  1. Treat social media like your home. Don’t let strangers in, build a wall and protect yourself and your family. When it comes to privacy, nothing is out of scope, so look at everything – includingthe kitchen sink – because even those plans for a new kitchen can open the door to scrutiny where significant financial value is attached.
  2. Educate your children on how to keep themselves safe and their information private. We were recently instructed by a prominent executive whose child was targeted by journalists whilst at university. It transpired that the journalists had secretly befriended the child’s friends via social media, and had offered them money to obtain private family information.
  3. Control the circulation of photographs that are taken of you – particularly at public events. Consider buying the copyright so that you can then control their use and prevent them being used by the media. If you can stop the photos being used, there will be far fewer articles about you. An article is less interesting without a photo.
  4. We are told that moving house is only superseded by death and divorce in the stress stakes, but fail to take the privacy risks into account and the dream move can quickly turn into a nightmare. Whether it’s the interior of your home appearing in the front window of the estate agent, or the planning permission for your new house extension being made public, ensure that proper contracts are in place and that the confidentiality obligations are fully understood.
  5. Few people want to think about the media impact of a holiday, but with an eye on the Easter holidays and impending trips to the Caribbean or the Alps, it’s important to take necessary precautions to avoid unwanted attention. First, ascertain where and how details of your holiday might become known, who might record images of it, and whether there is anything noteworthy that you plan to do that is best avoided. Second, think about how photos taken of you on holiday will be of interest to others. Will the pictures themselves be of interest, or could they be used to illustrate another story about you? Finally, talk to your family and guests so that they don’t inadvertently end up disclosing where you’re going or what you’re doing via social media.   Rest assured others will be on the lookout for  any snippet of information they can get their hands on.
  6. In the event of a privacy infringement don’t hesitate when it comes to instructing your lawyers. In guarding your and your family’s privacy, be prepared to take appropriate action. Request that your lawyers use confidentiality and privacy rights to prevent sharing or publication of images. In the event images have already been published online, ask your lawyers to have them removed.

One prominent businessman recently complained to us that details of his bonus were in the public domain and wanted to take action to protect the information. It turned out the details were revealed by his daughter who had posted the information on Facebook having heard a discussion at the dinner table. These are new risks that we all face. Previously, children might have told their friends something and that was that, but now their discussions are there for all and sundry to see. Crucially, acting fast is a necessity, because if information does get out then it needs to be stopped immediately before it gains traction. In addition to using the law, hedge fund owners can benefit from assessing their own digital footprint. The trick here is to get interested before someone else does. Forewarned is forearmed and, ‘private’ social media settings aren’t going to cut it, because for prominent individuals, the picture is far more complex.

Ultimately, only by understanding your own digital footprint and the footprints of those closest to you is it possible to ensure your private life remains private from prying eyes, especially with the UK general election and the US presidential primaries just months away.

Rachel Atkins, partner at Schillings, is a litigation lawyer specialising in reputation defence. With a client base comprised of entrepreneurs,privately owned businesses and FTSE 100 companies, Atkins couples her experience in media law with a detailed knowledge of reputation threats that emanate from non-media sources.