I'm sure he got paid well over $1M to say "meh FTX" or whatever it was.
So it depends on whether you think "endorsement" is "taking money to associate yourself with a company by appearing on video in their advertisement" or saying on the record "I endorse this company, I use their products, etc."
Most endorsements are now in the former category, although it does seem like modern podcasts also have explicit ones in the latter category too
I do not know of any reasonable interpretation of reality in which “these people payed me a lot of money to make an ad for them but I do not think they are legit so I will take their cash but use the platform they provide me to keep on repeating that I think they are all a fad and I do not recommend them” can be considered an endorsement.
You have it reversed. The celebrity endorser is the platform. FTX has no platform, they have money and can buy commercial time. Larry David has his own 'brand', and people like you and I have positive feelings towards it. His mere appearance in an FTX commercial is him lending his platform of positive feelings we all have for him over to the brand of FTX, so that we may associate those positive feelings toward them. That's the endorsement. Even if he said, "FTX fucking sucks, and so does crypto!" in the ad, people would think, haha that's so funny, did he really say that in a commercial?! And the next time they think about crypto they remember their jovial laughter at that dumb ad and "FTX."
I also don't care that he endorsed them and don't think he's at all responsible for people losing money in crypto.
> As for the others, if people listen to a football/movie/fashion/etc star for investment advice, I think they should know what to expect.
That was my first impulse, but then I realized that I would never do such a thing myself. And that really, the regulation should mainly be about protecting the interests of those that would. Adding a layer of bureaucracy and requiring promoters to due diligence, on the plus side it will help protect people, on the minus side it will cut into the margins of these celebrities and the industries around them, which could lead to the sector shrinking and worse entertainment. That tradeoff needs to be made with the people that stand to be affected the most in mind.
Promotors should be more responsible than the Regulators?
If it was obviously a fraud at the time, the police and SEC should have shut it down. Why expect some random celebrity to do more diligence and gatekeeping than the officials that license FTX?
If a product is legal to sell, and legal to advertise, then actors should not be held responsible.
> If a product is legal to sell, and legal to advertise, then actors should not be held responsible.
FTX was in a legal gray area. They were using customer funds in part to make large campaign donations and influence the, at the time hotly debated, regulatory decisions about cryptocurrency.
Yes it's very important to pay attention to how the victims feel about the whole thing. Whether they think they themselves should have known better or think they should have been better protected.
I am not usually one to defend celebrities, but this is absurd. A celebrity spokesperson is essentially no different than a contractor or consultant for a company, just more high profile. Its not like Larry David and Tom Brady were given a run down of their books and internal processes. You might as well go over the every caterer they ever hired or the people they hired to clean their offices.
Meanwhile the investors in FTX almost assuredly had some idea on their internal processes and would have been aware of the lack of chief compliance officer.
> You might as well go over the every caterer they ever hired or the people they hired to clean their offices.
There's a significant difference between a caterer and a high-profile celebrity endorsing something. You don't think there are people who joined FTX as a result of these promotions?
While I like Larry David, he has no business promoting financial products to consumers. In fact, I think it should be illegal for celebrities or "influencers" to promote any kind of financial products.
I dont think there is a difference between the two groups, no. My mind, when i see a celebrity endorsing a product, puts them clearly into the role of someone selling their product for money. Does some model have more business selling cocacola than larry david selling ftx? Larry david is a pretty wealthy guy, i wouldnt be surprised if hes done his due dilligence on finance and talks to advisors on the matter regularly. While a model might not actually know the health implications of drinking coke, and may not drink it personally.
They both seem to be saying the same thing to me. It's an actor in a commercial; they're acting. They're not giving you friendly advice.
Now one can argue that it should be illegal for anyone to advertise for a product or be paid to say nice things about it (like the smiling guy wearing a lab coat while the screen says 4/5 dentists recommend whichever toothpaste), but otherwise I don't see why celebrities should be uniquely liable.
Larry David isn't giving me financial advice. Larry David is selling his image / voice / comedic talents / acting abilities to FTX. Just like a model or singer or athlete is just selling their image to coke. It makes no sense to go after them
But then this is a principle, and it's got nothing to do with Larry David et al. Further, it has nothing to do with the FTX outcome, since the principle is not about particular outcomes, but general risks.
Given that, it makes no sense to go after any of the celebrities in this instance, since they did nothing wrong in particular except violate an abstract principle, not a law or regulation.
If no celebrities should ever endorse financial products (not sure I agree with this), then some regulatory body or legislative body should constrain us to that.
But to tell you the truth, that strikes me as pretty stupid, since this principle can be applied easily outside of financial concerns. The result, if applied correctly, would be that no celebrity should ever endorse any product whatever, since every product has massive, latent risk that would not be able to be reasonably known by any celebrity. Think recalls. Think contamination. Think unknown drug side effects. Think mechanical failure. Etc.
Go after the people who are responsible and who should know, not the incidental agents who just happen to be involved in some tragic fraud or malfeasance of which they knew nothing and could not have been expected to know. Massive misattribution of blame.
OTOH, a significant subset of people do use Social Proof, including celebrity endorsements, as a criteria for purchasing decisions, despite the fact that unless explicitly stated, the endorsement says nothing about any due diligence done by the celeb.
So is it the responsibility of the fool who uses social proof without doing their own due diligence, or is it the fault of the celeb accepting payment for the promotional work?
If they are just going after the celebs to claw back any earnings, which would be put back in the pot to compensate victims, that seems reasonable.
But to go after them as if they were co-conspirators seems quite unjust.
I would not be opposed to putting those who do the promotional work on the hook for giving back a percentage of earnings to compensate victims.
I do think, however, that the principle would have to be applied more generally and pertain to most if not all promotional work.
Practical difficulties aside, this might have the added benefit of highly discouraging celebrities to promote anything. I say benefit, because to my mind it's vacuous, tasteless, and toxic for celebrities to promote products. This goes to podcasters and YouTubers, as well. If I hear one more otherwise respectable person shill investments into Master Works rather than index funds...
Obviously, now you have a huge problem of defining celebrity. We've gone from Larry David to some podcaster who would be banned from promoting "anything". So basically this just means the only legal ads are like the guys who twirl signs around on the street.
Should we do the same for any employee of a company? They should do their due diligence before they give material support to the company's mission, lest they lose double all the wages they earned?
But Larry David explicitly did not recommend FTX. He got paid to say he didn’t like it in a comedy sketch. I don’t see how anyone with any knowledge of Larry would reasonably conclude that he is genuinely into crypto after that ad.
In the commercial, Larry is a contrarian who opposes every great invention starting with the wheel. At the end, he says that he doesn't recommend FTX. It's clearly an endorsement, even if within the commercial he doesn't literally say "In Larry David and this is my favorite crypto currency exchange".
Moreover, it's a major promotional video for FTX. He presumably would not have agreed to star in it if he didn't like it (or the money).
> You might as well go over the every caterer they ever hired or the people they hired to clean their offices.
Neither of these options are likely to pay off in a lawsuit. Larry David and Tom Brady however just might settle whether you believe it's right or not.
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.
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.
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.
> 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.
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.
If they paid multi-million dollar consulting contracts to their PR firm the bankruptcy process will try to claw that back too.
Remember, this was customer money. Anything they sent out the door belongs to the customers that are currently out of pocket. This is not investors complaining since their bet went to zero.
I could see the argument that the endorsement fee was ill gotten and should be returned. Is that what they're after? Or are they seeking to reclaim all the lost money, in excess of what the endorsers were paid?
Would be nice if they acted on the evidence and guidance I provided to them in regard to the Slope Wallet rug pull.
The wallet was highly promoted by SBF and the entire Solana foundation. I provided them in depth information about it and those involved as well as methods by which they can identify and locate those individuals.
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[ 0.22 ms ] story [ 103 ms ] threadAs for the others, if people listen to a football/movie/fashion/etc star for investment advice, I think they should know what to expect.
I'm sure he got paid well over $1M to say "meh FTX" or whatever it was.
So it depends on whether you think "endorsement" is "taking money to associate yourself with a company by appearing on video in their advertisement" or saying on the record "I endorse this company, I use their products, etc."
Most endorsements are now in the former category, although it does seem like modern podcasts also have explicit ones in the latter category too
10 million dollars, according to Michael Lewis in his recent 60 Minutes interview.
I also don't care that he endorsed them and don't think he's at all responsible for people losing money in crypto.
That was my first impulse, but then I realized that I would never do such a thing myself. And that really, the regulation should mainly be about protecting the interests of those that would. Adding a layer of bureaucracy and requiring promoters to due diligence, on the plus side it will help protect people, on the minus side it will cut into the margins of these celebrities and the industries around them, which could lead to the sector shrinking and worse entertainment. That tradeoff needs to be made with the people that stand to be affected the most in mind.
Promotors should be more responsible than the Regulators?
If it was obviously a fraud at the time, the police and SEC should have shut it down. Why expect some random celebrity to do more diligence and gatekeeping than the officials that license FTX?
If a product is legal to sell, and legal to advertise, then actors should not be held responsible.
FTX was in a legal gray area. They were using customer funds in part to make large campaign donations and influence the, at the time hotly debated, regulatory decisions about cryptocurrency.
The "random" celebrities were paid tens of millions of dollars, that's why.
It's a separate question about the failure of regulators and law enforcement. It turns out that more than one party can do something wrong.
Meanwhile the investors in FTX almost assuredly had some idea on their internal processes and would have been aware of the lack of chief compliance officer.
There's a significant difference between a caterer and a high-profile celebrity endorsing something. You don't think there are people who joined FTX as a result of these promotions?
While I like Larry David, he has no business promoting financial products to consumers. In fact, I think it should be illegal for celebrities or "influencers" to promote any kind of financial products.
Now one can argue that it should be illegal for anyone to advertise for a product or be paid to say nice things about it (like the smiling guy wearing a lab coat while the screen says 4/5 dentists recommend whichever toothpaste), but otherwise I don't see why celebrities should be uniquely liable.
Given that, it makes no sense to go after any of the celebrities in this instance, since they did nothing wrong in particular except violate an abstract principle, not a law or regulation.
If no celebrities should ever endorse financial products (not sure I agree with this), then some regulatory body or legislative body should constrain us to that.
But to tell you the truth, that strikes me as pretty stupid, since this principle can be applied easily outside of financial concerns. The result, if applied correctly, would be that no celebrity should ever endorse any product whatever, since every product has massive, latent risk that would not be able to be reasonably known by any celebrity. Think recalls. Think contamination. Think unknown drug side effects. Think mechanical failure. Etc.
Go after the people who are responsible and who should know, not the incidental agents who just happen to be involved in some tragic fraud or malfeasance of which they knew nothing and could not have been expected to know. Massive misattribution of blame.
So is it the responsibility of the fool who uses social proof without doing their own due diligence, or is it the fault of the celeb accepting payment for the promotional work?
If they are just going after the celebs to claw back any earnings, which would be put back in the pot to compensate victims, that seems reasonable.
But to go after them as if they were co-conspirators seems quite unjust.
I do think, however, that the principle would have to be applied more generally and pertain to most if not all promotional work.
Practical difficulties aside, this might have the added benefit of highly discouraging celebrities to promote anything. I say benefit, because to my mind it's vacuous, tasteless, and toxic for celebrities to promote products. This goes to podcasters and YouTubers, as well. If I hear one more otherwise respectable person shill investments into Master Works rather than index funds...
Moreover, it's a major promotional video for FTX. He presumably would not have agreed to star in it if he didn't like it (or the money).
Neither of these options are likely to pay off in a lawsuit. Larry David and Tom Brady however just might settle whether you believe it's right or not.
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.
You have a public company, licensed to operate by a government regulator, and you want to hold paid actors accountable?
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.
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.
Remember, this was customer money. Anything they sent out the door belongs to the customers that are currently out of pocket. This is not investors complaining since their bet went to zero.
What if Tom Brady was given FTX stock or some cryptocurrency, publicly endorsed it, watched the value increase, then sold?
Caveat emptor, as P. T. Barnum used to say.
The wallet was highly promoted by SBF and the entire Solana foundation. I provided them in depth information about it and those involved as well as methods by which they can identify and locate those individuals.