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Comment by UIUC_06 | Hacker News Reader

.. and Steph Curry!

Does anyone have any litigation history on "celebrities endorsing something that turns out to be a fraud"?

I would think they wouldn't end up having to pay much, if anything. Their lawyers would argue "Hey, you made your own decisions! Don't blame it on Steph!"

But I would predict they make a token payment and get dismissed from the suit. Just a guess.

Edit: I don't disagree with any of the answers. I'm just curious as to whether this has ever happened before. I think "sue everyone who has any money" is the plaintiff philosophy here.

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The world would be better if people who endorsed things were liable for what they endorsed. They should feel the pressure to actually look into what they’re advocating. I hope this is a pivot moment.

I would prefer if the FTC banned celebrities from endorsing financial products instead of an ad hoc system of suing people after a scandal (of various size).

Otherwise - I'm not sure how this would really ever work. Will commercial directors and producers also be found liable? What if you endorse something like a normal Visa credit card and then three years later there is a scandal at Visa? What if FTX just lost 3% of customer funds? What due diligence could Giselle really have done? FTX was invested in by respected VC and SBF was featured positively in Forbes and the traditional media.

The FTC has no statutory authority to issue such a ban. There is no legal definition of "celebrity". It's such a vague term as to be meaningless in a legal sense.

You may be right that they wouldnt want the eventual complexity but I don't think it would be impossible to say that if someone in an ad uses their existing name and likeness then it is different than just a random model smiling in the ad. The FTX ad with Brady relied heavily on his actual likeness

https://www.youtube.com/watch?v=xFZqk8k4QwQ

"Celebrity" is ill defined, but the law definitely recognizes a public figure

I'm pretty sure banning endorsements would violate the first amendment. It has to be something very serious to justify prior restraint. Making the consequences of a bad endorsement large on the other hand does not have such issues.

I'm pretty sure it would not violate the first amendment. The FTC already limits what drug advertisers can say and what financial advertisers can say. Some products like cigarettes can't even be advertised. Until fairly recently hedge funds were not allowed to advertise. I'm not sure why the FTC or SEC couldn't put the same rules in place (if it wanted) for trading platforms.

https://www.jonesday.com/en/insights/2013/12/sec-lifts-longt...

Why stop at financial products? If a celebrity advertises a car as safe and then someone close to you dies in a crash, should you not hold that celebrity accountable? Why didn't they look into all claims about safety of those cars?

I was proposing you ban endorsements of financial products so that it would not be possible to sue someone for later wrongdoings by that company. Once you have explicit rules for what is legal and what is not (there are already these rules) then it eliminates any confusion of whats illegal if you are a public figure.

The practical way this would work is probably insurance - if you want to pay a celebrity to endorse a product, then you also buy an insurance policy which will pay their costs if they’re sued due to that endorsement. That makes it similar to other professional liability insurance.

Commercial directors and producers should also be held liable. We have a marketing industry which is far too ambivalent about the negative impacts they scale.

How would one do this without crushing free speech?

If the spokesperson is completely hoodwinked, what then?

The buyer pretty much has to know that these kinds of investments are essentially 3 Card Monte.

The right to free speech is not absolute (for one example, see https://en.wikipedia.org/wiki/Imminent_lawless_action). I mean the government has every right to arrest and reprimand you if you happen to yell "I have a bomb!" in a crowded airport. So in similar regards, doing this wouldn't necessarily crush free speech as it currently stands.

As for being hoodwinked, then still hold them to a fault. Some people might find that unjust, but again, it would force people to try to think, behave, and act more responsibly (or else face repercussions). Otherwise, people could always just play the naivety card, akin to "I didn't know the law, so I shouldn't be penalized for breaking it". Arguably, if you enable such, then society can become a race to the bottom in zero accountability and all that comes with it. Hence why some people think that a part of being a responsible adult, means owning up to your mistakes, even if you didn't know any better.

In the context of advertising speech, the non-absolute point seems moot. How would one boost business by sowing chaos?

Actors tend to have agents for the very due diligence reason under discussion.

Hammer the agents for professional malpractice if the agents don't suss out the scam.

Well in the context of advertising, the matter is not so much about boosting business by sowing chaos, but more of a matter of whether does free speech allow you to promote fraud. It has already been deemed that fraud is not necessarily protected by the first amendment, so what I'm saying is: if we reiterate that, it doesn't exactly "crush" free speech as it currently stands. But whether that's actually the case here (celebs involved in fraud), I agree is moot.

Let me also add that, holding someone to a fault doesn't necessarily mean to the same degree. Innocence isn't necessarily a black and white matter, and you can always adjust the punishment to fit the crime.

Anyhow, certainly the most innocent people here, are taxpayers not whatsoever involved in the matter, especially those who have been exclaiming about the dangers of crypto for reasons such as this. They should not be the ones forced to pay.

How would that work? Brand ambassadors, celebrities hired for ad campaigns etc aren’t company employees. They don’t have any input on the product or the company’s direction.

A brand ambassador makes claims about something being great. If the claims are baseless then the brand ambassador is misleading people in a way that harms them. Just because the brand ambassador didn’t look into it doesn’t change anything. That’s just them being irresponsible.

A brand ambassador should be a famous face of a legit auditing practice. Anything less is accepting bullshit into the system… if the system is designed for large numbers of people to take your advice then the system should hold you accountable if the advice is wrong / poorly researched.

This argument is nonsensical. The only way to accomplish that would be to ban all product endorsements outright. Do you want to hold celebrities who endorsed VW cars liable for the VW diesel scandal? How about actors who endorsed anything that ended up being not what it was presented to be? I hate advertisement and would love for it to not exists. But if we allow its existence you can't expect all participants to conduct a deep investigation before uttering a word.

Yes they should be liable for all of those things. If they make a general endorsement they should absorb general liability for that endorsement harming people.

This is probably why so many celebrities sue people using their likeness without permission. It lessens their "brand" when people think they are endorsing products like that.

Floyd Mayweather, DJ Khaled, and Kim Kardashian were fined for promoting cryptocurrencies without disclosing their full financial relationship with the cryptocurrencies.

https://youtu.be/hCEUjBx_yXg?t=468

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