Bots and trolls get down to the business of propaganda
Harassment and intimidation are part of business, but social media creates a whole new problem
Last week I had a moment in which I was grateful for the Bell Pottinger-crafted online harassment campaign that the Guptas inflicted on several journalists and commentators. I was grateful because it made it easy to recognise the playbook when it was brought out from a completely different angle.
My firm, Intellidex, had published a detailed report on short selling and Viceroy Research, which is known for its reports on Steinhoff and Capitec. Within hours fake accounts had sprung up on Twitter alleging all sorts of spurious conflicts and other alleged misdeeds, not only about us, but about several journalists and hedge fund managers who are alleged to have interacted with us, including journalists from Business Day and other outlets.
This is exactly the Gupta harassment strategy: target individuals you believe, rightly or wrongly, are involved in exposing you. And then target them with nonsense until they shrink from the public domain. It also creates a distraction, which is useful because it shifts focus from the serious points and arguments being made.
Harassment and intimidation are part of business and happen offline too. Investment analysts can also be subjected to it. It can cross the line into outright violence.Perhaps the most egregious example is that of former Allan Gray chief investment officer Stephen Mildenhall, who was shot three times in 2005 after he had publicly questioned Brett Kebble’s plans to restructure JCI and RandGold. It later turned out the attempted hit had been ordered by Kebble’s head of security. Mildenhall was lucky to survive.
I’ve also experienced it, when I clashed with Regal Treasury bank CEO Jeff Levenstein in reports for the Financial Mail back in 2001, who responded at the time: “You and I will fight to the death over this.” When the bank later failed, it emerged in an inquiry that Levenstein had had me followed and had his henchmen throw pipe bombs at the premises of a company he believed had been a source of mine. He was later sentenced to eight years for fraud.
But the social media world creates a whole new harassment problem. It intertwines harassment with propaganda. This is not just about “fake news” but about a specific application of fake news. The objective of the harasser is to undermine trust in their adversaries, while simultaneously harassing those adversaries into abeyance.
Social media make this all the more feasible because it can be done anonymously, thus ensuring those behind it can escape consequence and obscure their own motives.Twitter has belatedly recognised the growing problem. Its founder and CEO Jack Dorsey acknowledged in March that “we have witnessed abuse, harassment, troll armies, manipulation through bots and human coordination, misinformation campaigns, and increasingly divisive echo chambers. We aren’t proud of how people have taken advantage of our service, or our inability to address it fast enough.”
Twitter has apparently taken steps to shut accounts that perpetrate harassment campaigns. There are also cases of Twitter providing the IP addresses of accounts to help identify who was behind them. But on the whole, so far, Twitter is far from solving the problem.
Sure, one can report accounts but not much seems to happen in response. Some have managed to get Twitter to hand over IP addresses of users, though that usually requires a court process.Perhaps the problem has been less noticed when it comes to investment research.
A report should stand or fall on the evidence and reasoning presented, whether it is negative or positive. As has often been noted, investment research produced by sell-side analysts is more often positive than negative, a feature often attributed to the financial incentives facing the investment banks that produce them. But what is seldom acknowledged is the incentive effects of the aggressive intimidation that can be launched by the subjects of such research.
When the report itself resists criticism, the next strategy of the scoundrel is to tackle the writers with targeted harassment. That can include legal attacks; certainly the authors of negative investment research have had to contend with legal threats and actions from companies they’ve covered.But legal attacks at least have the merit of being capable of adjudication by an independent and credible body. A social media disparagement campaign, however, can sidestep any reasonable judgment, cloak itself in anonymity, and denigrate not only the individual but also their message.
Dorsey promoted the idea of “conversational health” as a concept that can be measured. It is characterised by shared reality, variety of opinion, and receptivity. When it comes to investment research, conversational health is an aspiration for the kind of engagement that should follow. There should be overlap in what it is we’re talking about, agreement on what the facts are, and openness to hearing different opinions. That should be the standard for engagement.