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By Jared Shelly

Scenario: As the hot August sun beat down, protesters held hands to form a human chain around an old farmhouse, refusing to let members of theOhio State Policeget through.A standoff between protestors and policehad just entered its fourth hour and tensions were running high.

Thepolice wanted to evict the Anderson family, who had lived in the house since 1945, when the family patriarchJon Anderson built it after returning from World War II. Another day, another foreclosure in theOhio countryside-- but this time the foreclosed family had Shane and his fellowRiseUP membersontheir side.

Lt. Rob Donahue, a 25-year veteran of the state police force, made reasonable efforts to enforce the court order and carry on with the foreclosure and eviction. He asked the protestorspolitely to move. He told his officers not to use force. He waited and waited. He even told Shane he thinks that protesting foreclosures is a worthy cause but the police just needed to do their jobs.

But those efforts were countered with chants of "Down with banks!' and"People before profits!"

The final straw came when Shane spit directly into Donahue's face, then began to chant "Hell no, we won't go!"

Donahue reached for his pepper spray can and began dousing Shane in the face, forcing the protester to fall to the ground. But with his face burning and tears rolling,Shane got back up and began screaming: "No more foreclosures! No more foreclosures! No more foreclosures!"

The police never broke through the line of protestorsand eventually retreated. At least for one more night, the Andersons kept their home. A supporter filmed the pepper-spray incident with a cell-phone video camera then turned it over the RiseUP communications team -- comprised of a nightclub promoter, a few Silicon Valley whiz kids and several talented hackers -- who posted it on YouTube (however Shane's spitting incident didn't make the final cut). Then they sent the video to Facebook pages and Twitter accounts all over the country, to start creating a buzz among supporters and the general public.

When it went viral, Shane's meteoric rise to fame began. In the span of just one month, Shane became aninternational star and became the face of the RiseUP protest movement. His good looks and gregarious personality were made for TV interviews and were a hit with the ladies.

The donationsstarted to pour in via the RiseUP website, PayPal, Facebook credits and even text messages ? and the 'war chest' was beingmeticulously managed by the RiseUP accounting team made up of Ivy League finance grads.

With a charismatic leader, advanced communication skills, good fiscal stewardship and a clear message of disrupting foreclosures, RiseUPis a far cry from Occupy Wall Street which made headlines a few years ago ? and is getting a lot more support.

Just a few weeks ago, #RiseUPhadn'tmeant anything to anybody. Now the hashtag is known throughout cyber space and the group's anti-corporate message is scaring risk managers everywhere.

"Everybody #RiseUP. Noon. All 257 Eagle Trust Corp. locations in the US. Bring friends," readShane's Tweet on what seemed like a typical Wednesday morning.

By 12 p.m., the offices and branches of the megabank were inundated with protesters who blocked entrances and held signs reading "Keep Families in their Homes" and "Time for Banks to Pay." The protests were so fierce that 167 branches closed their doors for the day, whilethe bank'soffices in big cities were forced to bring in emergency security crews. Several of the protestors at each location were seen wearing GoPro cameras strapped to their chest or head.

At the corporate offices in New York, several thousand protesters wearing "The Battle of Eagle Trust" T-shirtsattempted to enterthe lobby ofa Manhattan skyscraper in a full-out attack that was directed by RiseUP's best-trained squad. Spotters, strategically positioned at every corner within a 20-block radius, streamed surveillance video from their iPhones that documented police response. Each spotter also wore a wireless access point that created a secure and private digital network. Disguised as a homeless person, Shane followed along with the video footage and coordinatedthe placement of obstacles to preventpolice attempts to respond.

"Watch #RiseUP fight the "Battle of Eagle Trust". Download the free app" ricocheted around the globe via Twitter. Suddenly millions of people were able to watch the live footage broadcast by protestors and carefully directed by the RiseUP media team. The app was also packed with propaganda, much of it false, outlining the perceived illegal actions of Eagle Trust Corp. News organizations rebroadcast the video and reported the propaganda material without fact checking it. Facebook and Twitter were inundated with the content.

Meanwhile, thestreets around the skyscraper started to resemble a war zone as protestorsbegan doing what they could to destroy thebuilding. Glass from shattered windows was everywhere;protestors began setting tire fires and erecting barricades. All the while, RiseUP leveraged sophisticated ground tactics and communication techniques to battle the police and broadcast the events to the world.

"No stopping RiseUP NYC. #RiseUP battery park," read another Tweet by Shane, who signed up for Twitter under an alias to skirt any charges of inciting violence that might come his way.

And just like that, thousands of supporters gathered at Battery Park, where they tangled with public works officials and harassed citizens.

Eventually, police broke up each protest only to find another group materialize in a different part of the city, resulting in a bizarre game of whack-a-mole that lasted through the night. RiseUP succeeded in halting Eagle Trust Corp. operations for several days but also caused extensive property damage and multiple injuries to employees, protesters and police officers.A city that wasalready struggling financially was on the hook for police and emergency responder overtime and damages to public property. The problems faced by New York were echoed in dozens of municipalities throughout the country.

For Eagle Trust investors, the greatest expense came from the company'sdamaged reputation. Brand equity that had taken 200 years to build was severely damagedas the name "Eagle Trust" became synonymous with the ugly protests in Manhattan and around the country. In a four-day span, the company's stock fell 37 percent, wiping out billions in shareholder equity.

Analysis: As Occupy Wall Street and the Arab Spring showed us in 2011, it's getting easier and easier to organize massive protests using social media like Twitter and Facebook. All you seem to need are irate, organized citizens with smartphones.

The United States is now uniquely positioned for serious protests to take place, as an angry citizenry is combined with young, tech-savvy people who are out of work and frustrated with many aspects of modern society. That could lead to the emergence of a new group with violent intentions, cutting-edge technological abilities and serious organizational skills.

Protestors could go the violent route ? destroying company property, hurting employees or even starting riots, leading to expensive workers' comp claims and lawsuits claiming the company did not provide proper security. Protesters could go the cyber hacking route, stealing data, compromising computer systems or passing sensitive company data on to competitors. Or they could stage malicious protests but post bias videos online showing them to be the peaceful victims not the antagonists.

Whatever the case, the reputational damage could be most severe. If a company's name gets closely associated with protests and the collapsing financial market, they're likely to lose plenty of market share. That damage could be irreversible, driving away customers for good. A bank with seriously bad reputation could drive customers to pull their money out, said Richard Magrann-Wells, the Financial Institutions practice leader at Willis.

"It becomes self-fulfilling. Who wants to keep their money in there?" he said.

Even scarier is if a protest movement gets a supporter inside a bank and convinces them to conduct an unauthorized trade that could lose the company billions. A rogue trader at USB cost the company $2 billion, and while that person was not deliberately trying to sabotage the company, it shows that rogue trades can be made right under company leadership's noses.

Protesting against anti-piracy measures, hacking group Anonymous shut down a slew of websites in January, including the Department of Justice, Universal Music Group, the Motion Picture Association of America, the Recording Industry Association of America (RIAA) and the U.S. Copyright Office.

Brokers and carriers are analyzing the risk but aren't yet offering any coverage against protests, said Magrann-Wells.

"A few broken windows will not sink a financial institution," he said, "but an insider or reputational risk could."

A more violent round of protests could financially cripple cities that are already broke. Sending police officers to monitor protests, or break them up has a cost.

"Cities don't have the money to deal with that stuff," said Jonathan R. Shull, CEO of California Joint Powers Insurance Authority, a large municipal self-insurance pool.

Despite all the warning signs, John Chino, senior vice president at Arthur J. Gallagher said that public-sector underwriters aren't focused on losses from protests at all.

"We are right in the midst of renewal and marketing with underwriters," said Chino, "and not a single one has brought up the issue of exposures from protesters."

JARED SHELLY is senior editor/Web editor of Risk & Insurance®. He can be reached at riskletters@lrp.com.

April 13, 2012

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