Crisis Communication & IR Response Flashcards
7 cards from real CIRO practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Crisis Communication & IR Response flashcards as text
When a company faces an unexpected CEO resignation amid fraud allegations, what should the IR team prioritize in the first two hours?
Answer: Notify the board, legal counsel, and prepare a holding statement
Engaging legal counsel and the board while preparing a holding statement ensures the company responds responsibly before committing to a full public statement.
Which SEC regulation governs the timing and content of disclosures when a company learns of a material event during a crisis?
Answer: Rule 10b-5
Rule 10b-5 prohibits material misstatements or omissions in connection with securities transactions, making timely and accurate crisis disclosures legally essential.
A plant explosion injures workers and halts production. When drafting the initial investor communication, which element should appear first?
Answer: Acknowledgment of the incident and concern for affected individuals
Leading with acknowledgment and human concern demonstrates corporate responsibility and builds credibility before addressing financial implications.
During an activist investor campaign, the company's stock drops 15% in one day. Under Regulation FD, how should IR address analyst inquiries?
Answer: Refer all analysts to publicly available disclosures and use simultaneous public disclosure for any new material information
Regulation FD requires that any material nonpublic information disclosed to analysts must be simultaneously disclosed to the general public.
What is a 'dark site' in the context of crisis communication preparedness?
Answer: A pre-built website activated during a crisis to provide accurate stakeholder information
A dark site is a pre-prepared but unpublished website that can be quickly activated during a crisis to centralize official communications for all stakeholders.
A competitor releases false information claiming your company is under SEC investigation. What is the most appropriate IR response?
Answer: Issue a swift, factual denial with supporting documentation through official channels
A timely, factual denial distributed through official channels protects the company's reputation and reassures investors with verified information.
In a crisis scenario, which stakeholder group typically requires the most immediate outreach from the IR team?
Answer: Major institutional shareholders and research analysts
Institutional shareholders hold significant voting power and capital, making their confidence critical to share price stability during a crisis.