The founder of a research firm explained on Monday why he paid $6 million to Randall Lane, the former top editor of Forbes, who was fired last month after the media outlet learned of the transaction.
Mr. Lane, the former chief content officer of Forbes, received the multimillion-dollar payment “in recognition of the services and guidance” he provided to RJ Shook, the founder of Shook Research, including helping him sell the firm last year, Mr. Shook said in a statement to The New York Times.
Mr. Lane helped forge a partnership between Forbes and Mr. Shook’s firm after the two men met in 2011, Mr. Shook added. Shook Research provides rankings of financial advisers to Forbes, which uses the data to compile some of its popular and lucrative lists.
“My actions were taken with the best intentions, but ultimately the payment was a mistake,” Mr. Shook said. “I deeply regret that this has raised questions about the integrity and independence of Shook’s rankings.”
The men “maintained a close connection” since they met, Mr. Shook said. “He provided professional advice and guidance to me. In 2016, Randall helped to facilitate the partnership between Forbes Media and Shook Research. Later, he provided assistance in connection with my efforts to sell the company.”
Mr. Shook said he paid Mr. Lane after selling a controlling stake in Shook Research to PPC Enterprises, a private equity firm, last year.
Mr. Lane had no immediate comment. In a statement to The Times earlier this month, he called the payment “a gift” and said not disclosing it was a “serious error in judgment.”
Shook Research said in a statement on Monday that the payment, which was made “immediately following” the sale of the firm to PPC Enterprises last year, was not disclosed to the private equity firm. Shook Research discovered the payment “soon after” Mr. Shook left the firm in June.
Shook Research said that it would take steps to “further strengthen and demonstrate the independence of its rankings.” Those steps include commissioning an independent review of the company’s governance, creating a new “independence charter” to reaffirm that its rankings cannot be purchased, and providing increased transparency about how it collects data. The company also said it plans to change its brand, a process that was started in February.
“Shook Research remains focused on providing advisers, their clients and the wealth management profession with a trusted measure of excellence,” the statement said. Shook Research said that Mr. Lane was not involved in the rankings.
Mr. Shook’s statement addresses a mystery that has swirled around Mr. Lane’s exit since The Times reported on the payment.
News of the payment landed like a bombshell at Forbes, a 108-year-old business magazine. This week, Forbes journalists pressed executives to investigate by bombarding the magazine’s leaders with emails, part of their negotiations for a new union contract. “The revelation of Randall’s ‘secret payment’ is a stain on our reputation,” one said.
In a statement, Forbes said it had retained outside counsel to conduct “an independent and careful review of the facts,” adding that it was “exploring all appropriate actions to hold Mr. Lane to full account.” It called the payment “unacceptable” and inconsistent with its policies.
Forbes’s partnership with Shook Research was valuable, in part, because financial advisers who make the list can purchase plaques and logos promoting their inclusion, sometimes for thousands of dollars. That money was split by Forbes and Shook Research.
In his statement, Mr. Shook said that his payment to Mr. Lane was not connected to Shook Research’s rankings. Mr. Shook said that he would no longer have a role or ownership stake in Shook Research as part of an agreement with PPC Enterprises.
Still, some financial professionals were unnerved. Morgan Stanley Wealth Management, whose advisers appear in Shook’s lists, told employees in a memo that it would suspend participation in the company’s industry rankings.
“We remain focused on ensuring that the organizations with whom we partner uphold the high standards of integrity and transparency,” the memo said. Shook Research said it hoped to resume its relationship with Morgan Stanley after “continued dialogue.”
Forbes employees are not allowed to gain personally from the company’s business dealings and must seek permission before conducting outside business activities, according to a copy of the employee handbook obtained by The Times. Newsrooms do not allow employees to take payments from sources or business partners and are expected to avoid conflicts of interest in their work.
Mr. Lane was an influential figure at Forbes. He had worked at the magazine for the last 15 years and created some of its most valuable lists, including its 30 Under 30 Rankings. Mr. Lane’s projects outside of Forbes included the National Thoroughbred League, a competitive horseracing association, and “The Sound of America,” a rock musical about Benjamin Franklin.
