Happy Saturday – And happy Thanksgiving! I’m looking forward to some family time and all of the Thanksgiving food, except for turkey. I think turkey is overrated. It’s fine, but it’s a bottom-tier holiday food for me.
Here’s what I’ve been paying attention to over the last seven days:
- One day before the FTC voted unanimously to seek public comment regarding whether to modify or expand the scope of the Business Opportunity Rule, it announced that it sued and reached a settlement with Kevin David and his affiliated companies for violating the Biz Op Rule, the Consumer Review Fairness Act, Section 5 of the FTC Act, and prior commission determinations in connection with the defendants’ “Amazon Automation” services and crypto investment opportunities.
The proposed stipulated order enters a judgment of almost $53 million, which will be partially suspended (due to inability to pay) after the defendants pay $2.6 million.
The defendants allegedly violated so many of the FTC’s rules that the FTC compared them to an everything bagel.
There’s a lot to dig into regarding the aggressive marketing tactics and practices that the defendants used here, and that last link above is worth a read for anyone offering coaching, automated services, or or any opportunities marketed using earnings claims.
Long story short, you may want have counsel look over your business practices and your ads if they look like this:
For a 90-second tip about earnings claims, check out my most recent Instagram video, in case you missed it.
- Activewear brand Lilia’s Active is being sued by an influencer marketing agency for failing to pay over $150k in invoices.
The agency also accuses Lilia’s Active of “accepting orders … without any intent of honoring or fulfilling those orders.”
- Following FTX’s dramatic implosion, SBF and several celebrities who endorsed FTX (including Tom Brady, Gisele, Shaq, Steph Curry, and Larry David) face a class action for various securities law violations.
Some have asked why the celebrities appearing in FTX ads are potentially on the hook. Part of the reason is that, as the Complaint lays out, “although Defendants disclosed their partnerships with the FTX Entities, they have never disclosed the nature, scope, and amount of compensation they personally received in exchange for the promotion of the Deceptive FTX Platform,” which the SEC requires.
This, like the recent SEC settlement with Kim Kardashian over her Ethereum Max promotions, is a good reminder regarding the SEC disclosure requirements that go beyond those what the FTC requires in the context of promoting securities. So keep them in mind if you engage celebrities (or anyone else) to promote crypto projects on social media.
- Speaking of crypto debacles, Bitcoin Latinum faces another investor lawsuit, and this one doesn’t mince words:
- Hormel Foods reached a settlement with the Animal Legal Defense Fund regarding Hormel’s allegedly false advertising of its “Natural Choice” brand of meats.
ALDF alleged that calling those products “natural” was misleading because the animals were fed hormones and antibiotics, and the meats contain artificial preservatives.
This case is yet another example of why I strongly recommend that anyone advertising any product using the word “natural” to have those ads carefully reviewed by counsel.
That single word has fueled countless lawsuits in recent years, and a judge might not think it means the same thing that you think it means.
- This is an interesting look at whether Twitter would enjoy Section 230 immunity in litigation arising out of the scores of fake tweets from imposter accounts that received verification badges under the new pay-to-play “Twitter Blue” subscription system.
- Tom Petty’s estate is considering suing Arizona GOP gubernatorial candidate Kari Lake for using “I Won’t Back Down” without permission in her social media posts.
- Elizabeth Holmes is going to prison for 11 years for the Theranos fraud.
Thanks for making it this far. Have a great weekend!