First SEC Touting Charges

For the first time, the Securities and Exchange Commission (SEC) charged two celebrities for failing to disclose their material connection to the investments being promoted. It is well established law that when a celebrity is paid to endorse a product, that payment is the basis for the material connection, which must be disclosed to the public in their endorsements. Failure to do, leads to unlawfully misleading the public. In the first SEC case, the celebrities were charged for “failing to disclose payments they received for promoting investments in Initial Coin Offerings (ICOs).” One celebrity posted to his social media “…starts in a few hours. Get yours before they sell out, I got mine…” The other posted “You can call me … Crypto … from now on.” One celebrity agreed to pay $614,775 in fines and penalties, the other paid $152,725 in fees and penalties. Best practices: ALWAYS DISCLOSE MATERIAL CONNECTION! #transparencyformstrust #substantiationequalstrust #advertisingandmarketinglawyer

https://www.sec.gov/news/press-release/2018-268