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 and Smith & Wesson , 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 , 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 , 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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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Dick's Sporting Goods. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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