I don't think the celebs are going to be held accountable (and I don't think they should be) in any real sense. None of them had any real insight into how it was being run and I wouldn't expect them to have that knowledge.
I do think people should be generally accountable for what they promote. Otherwise there is an open loop, where individuals and companies can get the upside without a corresponding downside of accountability. That inherently unbalanced the scales, which is a bad incentive.
Medical decisions shouldn’t be based on actors attractiveness… it should be based on efficacy and safety.
Fraud is not protected by the First Amendment [1]. This is old law.
Mercedes' Formula 1 car had like 6 FTX ads on it this season. Why isn't Mercedes or Lewis Hamilton in this class action?
I'm not sure it's a good idea, but it's an interesting idea. And the follow on effects of making endorsements things that people actually believe in would be a nice world.
I assume Mercedes/Lewis Hamilton weren't included because the lawyers went by whoever did it on the superbowl. Cause it was an easy list to find. And a lot of Americans don't know anything about F1 so it's under the radar.
Fraud was used by me as an example of the 1st amendment being okay with certain commercial speech being actionable.
In the "anonymous actor" situation, they are not trying to use someone's brand/honor so the perverse incentives don't appear to be present.
Of course. Nobody is sending them to jail. But at the very least, their earnings should go the victims. (Analogy: if your employer perpetuates fraud, they go to jail and you lose your job.)
My previous earnings aren’t taken. None of the contractors that did work for the company get their payments clawed back.
You don't have to give your paycheck back though.
You may if you’re senior enough. Public figures pushing nonsense are in positions of influence. It’s mind blowing that an emerging opinion on this forum is the beneficiaries of fraud should be immune from consequences.
We have centuries of case law on this. If I lose money in a fraud, you can be sure as hell I’ll sue everyone who took cash out. Naïveté is not an excuse for misconduct.
We aren’t the first generation asking these questions. Most of this is settled law. Profiting from perpetuating fraud generally involves clawbacks. Where the thresholds lie is a matter for courts. But everyone involved will be drawn into that process. If you find that distasteful, consider whether you are profiting from fraud.
While it’s true that these are old questions, it simply is not settled law that claws back money from employees who worked at a company doing wrong but didn’t perpetuate the fraud themselves.
So, the answer to my question might be that you acquired a misunderstanding of the law at some point. You also believed that most people in HN are versed in this area of business law so expected them to see this your way.
Nope. If they were aware, that’s criminal. If they were bystanders, that’s just tough luck. We are discussing liability.
Promoters have been held responsible for fraud, particularly around securities promotion, for over a century. This isn’t arcane law. It’s commonsensical for anyone not making their living peddling fraud.
it seems there is some conflation between a "brand ambassador" and someone hired to film a commercial.
if someone takes direct interest as payment for filming something, and they further go out and endorse it, then they are a brand ambassador.
if someone gets paid once for doing a job (or some residual per play), but nothing further, that sounds like payment for hire.
Though I can see taking whatever cash payments they got back, if it rightfully belongs to scammed customers.
What? No. Kardashian was fined because she advertised crypto without disclosing she was paid for the ad. Presumably these celebrities already made those disclosures, or it's understood since everyone knows TV ads are paid.
If I put my money into ftx because I saw Tom Brady hawking it that's on me. But to say that Tom is without responsibility ignores human nature. Celebrities get paid millions to endorse products because it demonstrably short-circuits our decision-making process.
Edit: to be clear I speak entirely on the moral/ethical side of the question. For better or worse the legal system doesn't legislate mortality.
If Larry David promotes a crypto exchange, my expectation is:
1.) Larry David doesn't know how crypto works, and very likely thinks it's stupid
2.) Larry David doesn't understand the additional layer of what a crypto exchange is
3.) Larry David doesn't have any opinion regarding which crypto exchange to use. He definitely doesn't know internals wrt how much of a reserve the exchange is keeping, and whether the coins with which they're backing other coins are reputable
If I lose money with this exchange, I place 0 blame on Larry David.
We all ought to be rational. We're not.
They’re entertainers, their contributions should be judged on entertainment value; the auditors should be the ones judged on audit quality.
If an auditor had raised flags and Tom and Larry went on to promote it knowing that, that’s a totally different story. But no-one knew, that’s kinda the whole problem.
This isn't like "washing hands is a good hygiene practice". Crypto is controversial, I can't throw a rock without hitting ten finance processionals that have ten contradictory opinions. Someone who doesn't know what they're talking about should stay in their lane and not spout crap they don't understand about stuff that has a major impact on people's finances. And if they do, then they own the consequences.
I don't know if it's legal, but let's say it is: are we ok with celebs endorsing gambling? I sure as hell am not, I don't care what the auditors say about the solvency of the platform.
The populous will be much better served by learning how to look at a bunch of actors* making a bunch of conflicting statements about a topic and gauging the net ground truth themselves than simply relying on the government to be the divine truth-tellers without question.
When they get bit here and there and lose some money, that's a pretty important lesson in returns too good to be true.
*Hewitt-Bishop, not David-McConaughey
If you're going to tell me you're any kind of "governance" advisor to a company that defrauded people to the tune of billions, I am not going to pretend you are somehow not partially liable.
People endorsing products have zero inputs in the decision making processes that lead to these meltdowns so I don’t really see how they can be held accountable.
Or the marketing person who created / managed an Instagram campaign?
Or the IT staff who setup notebooks and a VPN/firewall?
None of these (or many others) was even involved in the core product or are expected to know anything about financial regulations.
There is a reason that usually only senor leadership is involved in such suits.
There are exceptions to that rule of course
But Tom Brady owns his own crypto/nft scam company (autograph.io), so I wouldn't be surprised if he knew it was a money grab.
I also won't be surprised if he faces charges for it down the road.
He does this by using his celebrity power, as well as bringing in other big athletes (tiger woods for example) to pump up artificial demand for junk NFTs. I also think that the NFTs they sell are designed to be confusing, and the buyer probably doesn't know what they're (not) buying in many cases... although this is probably true for all NFTs.
This may all be legal now, but I think he's playing with fire. When people engage in greed fueled schemes like this, chances go up that they have engaged in actual fraud.
IMO what he's doing here is more crooked than his FTX involvement already.