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Comment by mc32 | Hacker News Reader

Celebrities and other influential personae should do their due diligence before becoming a mouthpiece for a product or service -especially an unknown product or service with little track record and if not, at least buy insurance against potential fraud.

They give weight to marginal or fraudulent enterprises and give dubious products and services credibility --thus there is some responsibility and if they cannot vet properly then indemnify themselves where someone else through premiums would establish whether it's viable or not.

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I think idiot customers should have to carry their own insurance in case they fail to do their own diligence and gamble on a product just because they see a paid actor in a commercial.

The Consumer Protection Act of 2019 codified celebrity endorsement liability into law. It requires celebrity endorsers to conduct sufficient due diligence to ensure that their endorsements are not misleading or unsubstantiated.

So, based on the contents of their endorsements, Larry David is probably in the clear (since he explicitly did not endorse FTX). OTOH, Tom Brady's ads stated that FTX was the "most trusted" and "most trustworthy" institution in crypto, so he appears to be screwed. And for a $30 million payday, he could definitely have afforded to conduct even a modicrum of due diligence.

Famously, Taylor Swift was approached about and endorsement and offered 9 figures...but turned it down after her team did due diligence.

Other celebrities endorsing other crypto scams have pled guilty and paid fines under this law, such as Kim Kardashian, Jake Paul, Soulja Boy, etc.

What would due diligence have revealed? If the SEC didn't know it was a fraud at that point, what power does Tom Brady have to figure it out?

For one thing, it's strange for a financial company to not have a CFO.

Should I contact the actor who plays the Progressive lady to make a claim?

Any celebrity or person whos is willing to endorse products and services for large money money should have a counsel whose business is to know how to do these things.

I think they should not.

We disagree.

You are expecting celebrities and their agents to have more investigative power and discretion than the SEC and the DOJ.

You have a public company, licensed to operate by a government regulator, and you want to hold paid actors accountable?

> You are expecting celebrities and their agents to have more investigative power and discretion than the SEC and the DOJ.

FTX did not have a CFO. It would not have taken much due diligence to figure out that something seemed fishy.

The SEC and DOJ make prosecutorial decisions and therefore need to meet a high burden of evidence. All a celebrity (& their team) needs is a feeling that something doesn't seem right.

Not at all. They only have to investigate the specific statementss that are coming out of their own mouth. The SEC and DOJ are responsible for investigating statements coming out of all 330 million mouths in the US, in addition to other responsibilities.

That actor is not a celebrity though. In fact she is practically anonymous. She was not hired to raise the visibility of the product or lend it credibility via her celebrity. A large majority of people in the US would be quite familiar with Tom Brady, Giselle Bundchen, Shaquille O'Neal etc. Almost nobody could name who the actor is that plays the woman in the Progressive ads without Googling it.

These were endorsements, not M&A deals. What kind of due diligence are you expecting? That a famous person is shilling a product should tell you nothing more than they got paid to do so.

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