NEW YORK: Don Middleberg, chairman and CEO of Middleberg Euro RSCG,
has put on three-month probation an employee who issued a misleading
press release for client Nuwave Technologies.
The release, stating that Nuwave would be featured in an article in
Barron's business news magazine, was sent out via Business Wire without
client approval. In fact, Nuwave was only placing an advertorial in the
issue, and planned no editorial coverage.
The press release was corrected after a little over two hours, but
Nuwave's stock price had already shot up by $2.50 in 40 minutes,
an 80% gain and 52-week high. The next day, the stock closed at $1.22, dollars .10 under its pre-fiasco price.
Middleberg said he has now reinstated standard procedure to clear all
releases with clients.
"This was a failure in communications that was understandable, but
should never have happened," said Middleberg.
Joseph Perone, business reporter at The Star-Ledger of Newark, NJ, who
wrote a story about the situation, praised Nuwave for its damage
control, but was critical of Middleberg.
"Certainly, if an account rep can be confused by the difference between
advertorial and editorial copy, that is a telling commentary in itself,"
Perone told PRWeek.
When asked whether the company would seek new PR counsel as a result of
the error, Nuwave's corporate communications head, CFO, and CEO refused