Two Celebrities Charged with Unlawfully Touting Coin Offerings
sec.gov
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At the same time I can list hundreds of people who give poor financial advice who have advanced degrees and decades of experience in finance. I mean hell, Mike Tyson is the posterboy for a boxer with some of the highest earnings who ended up bankrupt, and he hired Donald Trump as his financial adviser at one point haha.
In short, I certainly would be less inclined than average to take advice from someone who gets punched in the face for a living, but at the end of the day, you find smart people everyone, and you find treacherous people everywhere, too. I'd rather have an unremarkable advisor than a treacherous one (sadly Mayweather in this case was both, but not because he gets punched in the face for a living).
"His winnings reportedly totaled 35,863,120 sesterces, allegedly, over $15 billion in today’s dollars, an amount which could provide a year's supply of grain to the entire city of Rome, or pay the Roman army at its height for a fifth of a year. Classics professor Peter Struck describes him as "the best paid athlete of all time"."
Hand-wavey inflation statistics over the course of 2000 years of different economic systems and currencies on the basis of a few datapoints just don't work anyway, even if the 35m figure is correct. They may give a starting point, but you have to show a source, a decent methodology to back it up. This is it for Struck's claim (on which he stands completely alone as the only source ever cited in the hundreds of fluff-pieces about this factoid):
> His total take home amounted to five times the earnings of the highest paid provincial governors over a similar period—enough to provide grain for the entire city of Rome for one year, or to pay all the ordinary soldiers of the Roman Army at the height of its imperial reach for a fifth of a year. By today’s standards that last figure, assuming the apt comparison is what it takes to pay the wages of the American armed forces for the same period, would cash out to about $15 billion.
By his same token, take the earnings of the highest paid provincial governor (Jerry Brown at 200k), multiply it by five and you get $1m a year. So perhaps in 15 thousand years he'll get to $15b in earnings.
Or take the grain for the city of Rome for one year. An average person used about 18 bushels of grain per year, currently costs $5 a bushel, so the entire city could be fed with $90m, equal to his lifetime earnings. Not quite $15b either.
Besides, there are plenty of other decent price comparisons. A loaf of bread was 1/2 sesterce, translate it to a $1 loaf of bread and his lifetime earnings were around $70m.
There's also plenty of references to the amount of gold the entire military cost at the time (particularly because many coins at the time were minted in gold, so sesterces can easily be translated to a weight in gold). Gold being a pretty good store of value, it can be useful across for valuation comparisons over time. It would put his lifetime incomes around $100m, too.
And then his comparison, it's the worst and least applicable. He takes his salary relative to the costs of running a certain army at that time. Then he translates that to the costs of the US army at this time. That's not how you calculate the present value. It only says something about the relative sizes and expenditures on the army between these two times, not on his salary. A more apt comparison would be to take soldiers from a country with a most similar level of economic development today, like Malawi, and look at their income. It's about $500, then multiply it by the amount of soldiers his lifetime earnings were able to provide for. Looking at it this way, it'd be like having $14m today in Malawi (without access to the international market products). You'd be filthy rich, but you'd have to spend it mostly on paying people and agricultural products.
Which brings me to the last point: what is even the point of an across-time comparison like this. As rich as he was, he had no flush toilet, no electricity to read books at night, no airconditioning, air travel, a library of millions of songs, movies and books, not the medical care to live past 43 years old, or the ability to spend his wealth on a trip into space or to Mars. The best he could do with his money is have people prepare his food and bath and see to his sexual needs, not all that much more. The richest people in the year 0 can't compare on many fronts with most middle-class people today, in terms of wealth.
What about Michael Jordon?
It is actually, under a different federal agency for non-securities related advertisements.
The FTC already has ruled that people should at least put #ad on their posts, and has already fined influencers that didn't.
When securities are involved, all you have to do is mention how much you got paid to provide safe harbor from the federal securities regulator, and then to provide safe harbor from private securities litigants all you have to do is mention that you have no licenses and that the payment makes you unobjective. Bury it in line 30 of the Disclaimer. THERE, NOW ITS LEGAL
Currently instagram and some other social media sites don't have a good way to display long disclaimers, but you can get crafty in the stories, or in multi-slide posts.
Unfortunately, when it isn't clear that federal securities laws apply, you don't know if its just an FTC issue, or an SEC issue. So, we're getting there.
Didn't know this. For others:
> In May, the agency released dozens of letters it had sent to companies and stars giving them notice that they must tell fans about compensation for promotions on social media.
> Those are known within the agency as educational letters, whereas the recent ones are known as warning letters. For repeat offenders, the FTC could seek to impose fines.
https://www.reuters.com/article/us-usa-ftc-celebrities/ftc-d...
Does anyone know if any fines have actually been issued?
> under a different federal agency for non-securities related advertisements.
And nothing of value will be lost.
I guess we all are a bit guilty of giving our attention in part because we'd like to be like those who receive it, and getting money for what others have to pay for, . It's most visible in networks with a follow/follow-back economy like Instagram, but bloggers, conference speakers, anywhere a personal brand has wider reach than friends and family.
Bonkers when you take a step back. But logical given the context.
You may recall some books spiking up the best seller lists because Oprah recommended them.
In my original comment, I was more referring to advertisement like Tide putting up a billboard. How do they know it works? Well, I'm sure they do market surveys "Have you seen this billboard?" but it's probably full of bias. But in the grand scheme of things, it's just for market awareness as I said. Keep Tide on the minds of consumers.
Dan Bilzerian, for example, generated over $500K in marijuana prodct sales on black Friday, largely because of his social media posts. But he has aligned his entire Instagram account and his perceived lifestyle around the brand (he owns the company). That figure represents the culmination of months of posts surrounding his brand of marijuana products. The same with Kylie Cosmetics - it has become something that Kylie Jenner is synonymous with.
Their only form of marketing is paying a network of 3,000 influencers to post on social media about their clothes.
(FYI:Some of the dresses could be considered NSFW) https://wwd.com/fashion-news/fashion-features/inside-fashion...
E.g., did the $100K that Centra Tech gave Floyd Mayweather Jr (according to the article) pay off for them?
Quoting Marine Bank v. Weaver:
> The definition of "security" in the Securities Exchange Act of 1934 is quite broad. The Act was adopted to restore investors' confidence in the financial markets, and the term "security" was meant to include "the many types of instrument that, in our commercial world, fall within the ordinary concept of a security." The statutory definition excludes only currency and notes with a maturity of less than nine months. It includes ordinary stocks and bonds, along with the "countless and variable schemes devised by those who seek the use of the money of others on the promise of profits. Thus, the coverage of the antifraud provisions of the securities laws is not limited to instruments traded at securities exchanges and over-the-counter markets, but extends to uncommon and irregular instruments. We have repeatedly held that the test "'is what character the instrument is given in commerce by the terms of the offer, the plan of distribution, and the economic inducements held out to the prospect.'"
The formal definition:
> The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.
The law in the US makes a sort of essential determination that no reasonable person stakes their livelihood on the appreciation of a pair of exclusive sneakers, which is why Instagram "influencers" aren't generally on shaky legal ground.
A security without an active market in it? Still a security. A security which can't be traded even theoretically? Still a security.
A reason to make this nitpick is that promoters sometimes use "Oh this is just a commercial relationship between business partners and we're locking you into it in all sorts of interesting ways; therefore, we're not offering a security" as an argument. The government takes a dim view of it. (This was a major issue in the fractional orange groves case.)
I think the important bit for this thread is to distinguish between product endorsement and investment endorsement. The law, of course, sees those as two very different things.
Can you get in trouble for promoting fake money from Monopoly and trying to convince people that the collectible value of the Monopoly money will increase?
Monopoly money isn’t a security. ICO tokens are. Securities laws, including those requiring disclosure of sales incentives, apply to securities.
From https://www.google.com.hk/amp/s/cointelegraph.com/ico-101/wh...
So basically if you top up your namecheap account it will count as a token? Looks like yes, from this definition. Please explain to me why I'm wrong.
That being said, this particular regulatory disclosure requirement can arguably be considered a prohibition on a form of fraud, on the basis that all paid endorsements where the payment is not disclosed to the target audience are misleading the audience about the endorser's level of genuine interest in the product, and failing to disclose a materially significant fact about the endorsement that a reasonable audience would expect to be disclosed.
I'm not sure if a statutory rule is the best way to address this though. Its rigidity and one-size-fits-all approach may catch a lot of non-fraudulent actions in its net, and avoiding that should be the first priority of the justice system. Common law would better account for the peculiarities of each case and how they weigh into the question of whether an action is fraudulent.
First paragraph.