Sam Bankman-Fried has inked a settlement agreement with a group of FTX customers who have agreed to drop their class action lawsuit against him in exchange for his help going after celebrity promoters of the collapsed exchange.
One of those sponsors, Tom Brady, lost a bundle.
Tom Brady is the most famous face to promote and invest in FTX — and he also may have suffered the greatest individual loss. The Tampa Bay Buccaneers quarterback owned over 1.1 million common shares of FTX Trading, which equaled about $45 million before the company went bankrupt, according to Bloomberg.
Mr Brady believed in the stock & put his money where he mouth was.
I cannot see where he has any liability.
I certainly would not invest in a stock just because it was touted by a celebrity. A stock may come to me attention because a celebrity was touting it. But I would do my own diligence. And I wouldn’t blame the celebrity if that investment went south.
Well I guess one can sue for anything. But who would want others to know that you were a moron that bought a stock just because it was touted by a celebrity?
The fact that he invested in it does not absolve him of liability if he made false claims. I’ve not seen his ads so I can’t speak to that but there have been other celebrities sued for false advertising.
I can’t find any details on this case being resolved so it might still be in litigation, 11 years later. Most recent news I could find was from 2016 where a judge refused to dismiss the case.
More recently, Dave Ramsey has been sued for his endorsement of a product.
This actually is an interesting question. Even though the ads may briefly show a disclaimer, in tiny print, “compensated endorsement”, celebrities get paid big bux for these gigs, because people like them. “that reverse mortgage company must be OK, because Magnum is such a hunk, and always fights for what is right”. Viewers forget that they are actors, reading a script, for a big check.
“Mike Huckabee is a man of God. He wouldn’t lie about precious metals”.
Yep, if/when the gold market has any sort of negative volatility, I expect that a number of the less legitimate gold suppliers will be facing lawsuits. Some of those entities have ridiculous fees and make it very difficult (and costly) to get rid of your gold.
I remember one I researched a few years ago that had fees amounting to 16% to sell your gold. I just looked up GoldCo and they charge $125 in annual fees for an IRA, plus another $150 in storage fees, plus a $50 set up fee. No disclosure at all on what fees you pay to sell or how the value is determined at the time of sale.
I wonder what all those that bought a bar of gold through Costco are going to do when they want to get rid of it. There are not may local places that will buy your physical bar gold at spot prices - especially in a declining market.
On one hand you’d think that the endorser is just reading from a script. How much due diligence are they supposed to do?
On the other hand, crypto is scams all the way down, and there was no reason to think FTX wasn’t a scam. So Brady et. al. should be known they were hawking snake oil.
The crazy part is that SBF pleaded innocent to running a criminal enterprise, but he’s assisting the plaintiffs’ claim that he was running a criminal enterprise.
Of the $70 million in fradulent revenue collected by the scam, $30 million went to Ramsey for “marketing & promotion”
Onward Christian Grifters {{ LOL }}
When I moved to WA State from Texas in 2006, my health insurance premium dropped by 60%. WA State seems to be doing an excellent job of “Minimizing the Skim” you see in the Red States.
I would think that an unknown actor, reciting a script, would not be liable, because his “brand value” is zero. A known “celeb” has brand value. What a “celeb” says will carry more weight with his fans. Listen to Mike Huckabee saying “what I recommend to my friends and family”, vs an unknown saying “blah blah company sells precious metals” while showing the same charts and reciting the same FUD that are in Huckabee’s ad. Huckabee is making a personal endorsement. To my eye, that makes him liable for what comes out of his mouth.
The thing here is caveat emptor, remember? Let the buyer beware. But then we have gotten to the point where the seller has some reasonable culpability if they knowingly hawk a defective, dangerous, or otherwise inappropriate product - doesn’t matter if they’re a celebrity or not, in my view. Stupid people gonna stupid.
Over on another thread, a newbie is complaining that he followed the Motley Fool’s recommendations on buying a stock and now he’s out $10,000. Is the Fool responsible? It’s a “brand name”. It has “credibility”. It makes recommendations, and backs them up with evidence, or sometimes intuition, or sometimes history, and occasionally none of the above.
Are they liable? I don’t think so. Expensive lesson for the newbie to learn, but that’s today’s tuition in “get rich” land.
