USING CELEBRITIES FOR INSTAGRAM, TIKTOK OR SNAPCHAT MARKETING? THE SEC IS WATCHING…
Have you ever laughed at the ads for pharmaceuticals that outline a litany of warnings that are so ‘buyer beware’ focused that we wonder who would ever use the product? Well, that is what regulators expect in the name of transparency, disclosure, and consumer protection. The awareness of celebrity endorsements on television is well known and understood, but, with the advent of social media and the increased use of untraditional platforms as a marketing venue, investment industry participants should exercise caution, ensuring that full disclosures are provided. Specifically, under U.S. law, people who tout a certain stock or crypto security need to disclose not only that they are getting paid to do so, but also the amount, the source, and the nature of those payments. Full details are available here.