A press conference was held in the ‘Skandia auditorium’ at Skandia’s Head Office at Sveavägen 44, Stockholm on 1 December 2003. More than two years had elapsed since the terrorist attack in the USA, which had hit the insurance industry hard. A detailed description of the Skandia scandal, or rather the ‘fabricated’ Skandia scandal, was presented at this press conference. SVT broadcast live from the conference for more than three and a half hours. The auditorium was packed with journalists. Approximately 1,500 articles were published about this fabricated scandal over the three days surrounding the conference.
Skandia’s board of directors, via two supposedly expert investigators, presented a report at the press conference entitled ‘the Investigation Report’, which was followed up with a series of press releases. The information emerging from the Investigation Report, the press releases and during the press conference triggered a trial by media on a scale seldom witnessed in Sweden. The blame for the ‘Skandia scandal’ had been investigated and the findings regarded by just about everyone as indisputable facts. Skandia’s operational management, primarily its former CEO Lars-Eric Petersson and CFO Ulf Spång, were at the centre of the Skandia scandal. The mud-slinging campaign had begun.
Lars-Eric Petersson and Ulf Spång received essentially all of the blame for the allegedly awful situation and improprieties within Skandia, including the notorious bonus system. According to Skandia’s press release, both of these individuals had “broken rules, ignored board decisions and deceived their principals”, and had thereby committed acts that were probably “illegal”. Both were alleged in the press release to have “abused the confidence entrusted to them by Skandia’s customers, employees, board and owners”, and in doing so they had “harmed Skandia and Skandia’s reputation”. According to the press release, the blame and responsibility for these acts and “the damage caused” to Skandia rested “firmly” with Petersson and Spång.
The judgment of the media was pronounced and published within 24 hours: “Greedy, cowardly and mendacious”, “a dictatorial CEO”, “abysmal morals”, “highly unethical”, “they can’t get away with it”. Six hundred and eighty-five articles were published online during the day, most during or immediately after the press conference. The fabricated Skandia scandal was simply accepted by the entire media without any critical examination (with just one exception).
The author of this book Lex Skandia is a law professor and company law expert at the Stockholm School of Economics. He has endeavoured to expose the true Skandia scandal underlying the fabricated version. By conducting a detailed and thoroughly documented investigation of the entire course of events, both in and out of court, his study reveals among other things the following:
- All of the accusations made against Lars-Eric Petersson and Ulf Spång were totally unfounded. In fact, they cannot be – and ought not to have been – blamed for any criminal or unethical wrongdoings at all.
- The true wrongdoers were actually a number of Board members and a senior executive. The Board of Skandia knew exactly what it was doing when it decided at a Board meeting on 23 January 2000 to prolong the Wealthbuilder bonus system. In fact it was the Board of Skandia, and the Board alone, that decided on the conditions for the bonus systems.
- By initiating the Investigation Report, suppressing the truth and accusing innocent parties, the Board and a few of the other persons involved actually fabricated a scandal that proved exceedingly costly to Skandia in terms of the loss of trust among its customers.
The title of the book, ‘Lex Skandia’, connotes a general legislative proposition put forward by the author aimed at preventing fabricated scandals from being manufactured in the future, whereby it is proposed that responsibility should be placed on the third-parties involved for their failure to take action in response to such conduct.