CEO Gaffe of the Week: Tactical Response

Last year, I introduced a weekly series called "CEO Gaffe of the Week." Having come across more than a handful of questionable executive decisions when compiling my list of the worst CEOs of 2011, I thought it could be a learning experience for all of us if I pointed out apparent gaffes as they occur. Trusting your investments begins with trusting the leadership at the top -- and with leaders like these on your side, sometimes you don't need enemies!

This week, let's turn our attention to the privately held sector and put James Yeager, CEO of Tennessee-based defense training company Tactical Response, on the hot seat.

The dunce cap
I often avoid highlighting CEOs of privately held companies, but Yeager served up this week's gaffe on a silver platter. A special thanks to reader John Shutt for forwarding me the link that inspired this week's gaffe.

Yeager's megagoof relates back to the tragic elementary school shooting in Newtown, Conn., last month that took the lives of 26 innocent victims, mostly children. Since that incident, President Obama, Vice President Joe Biden, and other members of Congress, have vowed sweeping reforms on gun control. In a plan outlined on Wednesday, President Obama pledged to fight for mandatory background checks on all gun purchases (including private sales), reinstitute a ban on assault-style weapons, and ban high-capacity magazines that can hold more than 10 rounds. 

The nation's two largest gun makers, Sturm, Ruger (NYSE: RGR  ) and Smith & Wesson (NASDAQ: SWHC  ) , could wind up losing revenue if certain guns become unsellable and if rigorous background checks intensify. Both companies have already been slapped by Dick's Sporting Goods (NYSE: DKS  ) , which stopped carrying assault rifles shortly after the Newtown shooting, and it's quite possible other retailers may do the same.  

For other weapon makers, gun control reform could mean a boom in business. Taser International (NASDAQ: TASR  ) , a supplier of taser-based weapons, could see a surge in demand as guns become more difficult to obtain.

As a current Second Amendment right, I can completely understand gun advocate's concerns with regard to sweeping gun control reforms. Yeager, however, took things a bit too far when he posted a 32-second rant on YouTube a little more than a week ago, claiming he would "start killing people" if they attempted to take his guns. Yeager beseeched other gun advocates to "load your damn mags" and "get ready to fight" because he surmised a civil war was brewing. If this all sounds a little surreal, I assure you it's not. You can actually catch the raw video on The Huffington Post -- be warned, though, that the language is for mature audiences only. 

To the corner, Mr. Yeager
Whether or not you believe in gun control, rallying the troops via YouTube with a "start killing people" speech is never the answer. You aren't William Wallace, and this isn't the 14th century.

In response to the video, the state of Tennessee suspended Yeager's gun permit, pointing to "the material likelihood of risk of harm to the public" as the reason for their decision.

A few days later, Yeager released the following apology (with his lawyer by his side, may I add):

"I said some pretty volatile stuff which I apologize for. I do not in any way advocate the overthrowing of the United States government, nor do I condone any violent actions toward any elected officials... It's not time to shoot anybody. What it is time to do is to organize politically, contact our elected officials and help steer the ship the direction that we want it to go." 

Whether or not gun control reforms should be implemented really isn't for me to say. I feel that tougher restrictions are needed, but I also respect the right of gun owners through their Second Amendment right to bear arms. What I can say without a shred of doubt is that there are some bad people in this world that'll get their hands on a weapon one way or another, so I'm not overly optimistic that gun control reform will have any immediate impact. What I can also say, without a shred of doubt, is that people like James Yeager have no right to own a gun -- or be the CEO of a tactical defense company, for that matter.

Do you have a CEO you'd like to nominate for this dubious honor? Shoot me an email and a one- or two-sentence description of why your choice deserves next week's nomination, and you just may see your suggestion in the spotlight.

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Read/Post Comments (6) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 19, 2013, at 12:26 AM, pmoore4321 wrote:

    I don't know where to begin with the article. It's obvious that your "pro" ban and most likely short one or both of the gun stocks.

    Assault weapons make up but a fraction of the products produced by both SWHC and RGR, so the banning will not be their demise.

    Are you saying that Yeagers rant will cause a decline in share price of the gun stocks?

  • Report this Comment On January 19, 2013, at 4:05 AM, TMFUltraLong wrote:

    pmoore4321,

    I'm neither pro ban, nor pro reform, and as I disclosed above, I have no material interest in any companies mentioned in this article (or any weapons makers of any form, period).

    The banning of assault weapons isn't the major blow to Smith & Wesson and Sturm, Ruger so much as the extended background checks which can slowdown and impede the sales process.

    TMFUltraLong

  • Report this Comment On January 21, 2013, at 6:32 AM, mdickson99 wrote:

    Gun sales have been through the roof. Some items are back ordered going more then a year.

    Looking forward to next earnings report for SWHC.

  • Report this Comment On January 21, 2013, at 9:45 AM, NotTheDroid wrote:

    So many problems with this article, where to begin?

    - Assault Rifles have been illegal to own for decades. You showed extremely limited knowledge of the issue by using that term.

    - Coupling Yeager with the larger picture of large manufacturers amounts to comments about religion based on Westboro Baptist Church. It's not genuine to take that tact. You showed bias without regard to the issues or facts. Bad analysis but maybe you should consider being an op-ed writer for Huffington, eh?

    - Furthering your cause by stating Yeager has no right to own or be CEO of a company shows a complete lack of knowledge regarding what a 'right' is. Take a graduate level political science class please...

    - Stating that tougher restrictions are needed is so vague as to be funny. The current laws on the books aren't being enforced. They are actually very thorough and if enforced, might reduce criminals using firearms. What tougher restrictions do you have in mind? Just something tougher for the sake of making the vague statement?

    - Yeager is an idiot I'll grant you, but being a journalist requires the integrity to also report on all the leftist threats to the NRA executives, members, and anyone who owns a gun. Death threats started immediately toward those folks. Guess they don't meet your bar of idiot since they are on your side of the politics, eh?

    - Harvard just published another research paper indicating that murder rates are higher in first world countries that ban guns. Maybe the incidence of using a firearm to kill is lower, but people seem to want to murder others more, and they find many other ways to do so. Those stats have been around in many forms for decades, but Harvard took a new approach and came up with the same findings. The interesting aspect of this new research is that the researchers lean toward less guns, by their own admission. They just couldn't back up that opinion with their findings. Hmmm...

    Lastly, shouldn't this article be better as a Facebook post to your friends? Does it really measure up in any respect to the point of being a published article? Think about it.

  • Report this Comment On January 21, 2013, at 5:49 PM, JoshPittyTheFool wrote:

    Where is the dislike button? Sean Williams has no right to be a journalist.

  • Report this Comment On January 23, 2013, at 10:35 AM, beefangusbeef wrote:

    No "right" to be a CEO or own something? Well I think a party with members (or in this case leaders) that call for murder has no "right" to assemble or free speech.

    See, I can pick out one fringe whacko and make a case too. Maybe I should start being an "unbiased journalist"......

    http://www.thegatewaypundit.com/2012/12/texas-democratic-par...

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