The New York Times, chronicles the Internet smear campaign against the former head of Credit Suisse's private equity arm. The drama centers on a revenge campaign organized by a man whose ex-wife had an affair years ago with the CS exec. While the CS exec did not violate company policies (the woman was not affiliated with the firm in any way), the saga resulted in his leaving the firm.
This situation illustrates two realities. First, banks are completely on edge. With all the reputation risks associated with massive financial writedowns, they simply cannot withstand any other scandals or appearance of scandal. Even, John Thain, the "fixer," is under attack for misleading investors and poorly navigating Merrill Lynch's course through the credit crisis.
Second, it demonstrates that what is said on the Internet influences perception in the interconnected and information-hungry financial universe. Web sites and blogs move money and stock prices. In this case, a Web site got a guy fired.
Any hedge fund trying to affect change at a company needs to be campaigning online. This blog previously noted TCI's "Stronger CSX" site as an model of thoughtful and constructive advocacy on the Internet. William Ackman's recent restructuring plan for Fannie and Freddie is another example of using the Internet to influence opinion.