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Updated: Dec 2, 2023

The below lesson is an excerpt from my upcoming book, When Not If: A CEO's Guide to Overcoming Adversity, Forbes Book, January 2024.

LESSON: At times of extreme adversity, no one gives us a handbook on how to properly conduct ourselves. Every day and issue are new challenges we never expected to face, but if we can push fear to the side and draw upon our years of development and training, we can, hopefully, make more good choices than poor ones. But this is only for us to understand, and we cannot seek others to grasp our motives or approve of our decisions.

I believed there was no chance anything like this could materialize in our organization. We were wildly successful and didn’t need to cut corners. We had high ethical standards and trust in those we employed. I had never once had that pit in my stomach feeling that I could be breaking a law, or practicing activities that could even be perceived as unethical. I didn’t understand the bedrock was shifting under me. I was a sitting duck for a black swan event.

The regulatory behemoth was well-staffed and well-experienced at executing their mission, just as happens with the virtually unlimited resources of the FBI, SEC, DEA, FDA, EPA, DHS, FCC, DOL, and hundreds of state and local agencies available to be called upon. The investigation continued for months.

On March 10, 2010, FINRA issued a news release. This tactic usually sufficed to destroy the beleaguered firms being targeted without a fight, rendering them incapable of defending their position.

The next day, Peter Frost, writing for the Newport News Daily Press, reported, “The authority informed Martinovich and MICG on March 10th that it is preparing to bring six specific charges as a result of the investigation and offered the company a chance to submit an official response to defend itself. While FINRA has not yet filed formal charges, the notice it served to MICG signals that the regulator is at an advanced stage of its investigation and is preparing to levy charges.”

Dozens of other newspapers and websites picked up the news release. The ensuing barrage of front-page articles made for a surreal existence.

· MICG CEO Martinovich denies defrauding Newport News investor.

· MICG’s hedge fund investments in peril.

· Head of Newport News investment firm, MICG, being investigated for fraud.

· Local judges say, they can’t hear MICG lawsuit.

· MICG promised a silver lining in a cloud of mounting debt.

· MICG ordered to limit trading.

· EPV Solar, one of MICG Investment’s star holdings, is bankrupt.

· MICG, Martinovich banned from securities industry.

· FINRA Expels MICG Investment Management and Bars MICG’s CEO

· Martinovich’s riverfront home on the market for $2.6M

I struggled with “Do I hide?” or “Do I continue to lead my normal life as best possible?” Did one option admit guilt and the other show arrogance? I decided to hold my chin up, swallow the incredible guilt and anger, and show strength to prove our innocence. My favorite advertisement has always been the US Marines commercial: Toward the Sounds of Chaos, which ends with “Which way would you run?”

I picked up my coffee at my usual Starbucks but left the line when a client spotted me and repeatedly shouted, “You should be ashamed!” I went to my regular Bistro Thursday happy hour, and two gentlemen got up and moved to the other end of the bar.

I did, however, make a showing to walk my son, Cole, out onto the Hampton Roads Academy football field to honor him for Senior Night, even though my picture had covered the top and bottom fold of the paper that morning. He was captain of the team that year, and I was not going to let my fear cause us to miss that special evening. My heart raced as we turned to face the packed stands of parents, likely in shock that I would show my face before them.

Cole’s own challenge to get through this time was my greatest pain, and the questions from his friends would both infuriate me and bring my greatest despair. But my role was to show him as much strength and grace as I could call upon. Otherwise, everything I had taught him in the previous eighteen years would mean nothing. I am incredibly proud of his strength.

I’m not sure what was the right path here, but I knew I couldn’t win either way. Clients, shareholders, prosecutors, and judges repeatedly described my battle to prove our innocence as exhibiting no guilt, no shame, and no regret. At this time, and for the ensuing decade, I decided to run toward chaos. I’ll never know if this was the right answer, but, again, no one gives us a manual for this. Never expect or need others to support your decisions or understand. Leaders must just make a decision.

Have a great week!

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