New Orleans – Celebrity hawkers for cryptocurrency and nonfungible tokens or NFTs, as they are called, are in a bit of hot water. Singer Madonna, influencer Kim Kardashian, and NFL quarterback Tom Brady were among those named in civil suits by investors who took a bath on digital assets and are arguing that theses celebrity hustlers duped them. Federal regulators, like the SEC, are also supposedly casting a glance their way.
I’m shedding crocodile tears for these investors. They were trying to take a ride on the get-rich-train and most of them had pockets deep enough and experience long enough to know the risk, including that A-B- and C-list celebrities are going to say about anything and everything to make a buck. I doubt if their suits will go anywhere. They are probably just angling for a settlement to put a Band-Aid over their losses.
There is a real issue here in my mind, and it’s bigger than celebrities. There are laws that claim there has to be “truth in advertising”, but with the rise of social media hawking, either by big names or so-called influencers, regulators are not keeping up. The impact of these scams is not the fat wallets, but the easily deceived, naïve, young, old, and other folks easily victimized by their own desperation. We likely have the laws and regulations we need, but we don’t have the enforcement.
Influencers, some of whom have tens of thousands, even millions of followers, are not disclosing that their spiel has been bought and paid for by the companies and product managers they are touting. Same for the late-night vitamin supplements and dubious insurance products with the used-to-be-famous folks mouthing their claims. No amount of fine print buried at the end of the message should relieve either the companies or their spokespeople of liability for the harms they are causing.
I understand caveat emptor, the whole buyer beware thing, which is why I have virtually no sympathy for most crypto investors, who knew better. It’s the so-called little people who need protection, not the bigger dogs. It’s good news that the Consumer Financial Protection Bureau is back in business and has some of its teeth back, but a whole lot more federal and state action, and, yes, civil lawsuits, need to be directed not only at the predatory companies and their products, but at their hawkers as well.
The Journal says that some celeb agents are starting to counsel their clients to be more careful about agreeing to do some of these promotions. That’s not going to work. The agents are just trying a little bit of cover their own butts, because they don’t want to be sued for arranging the deal for hawkers. Plus, that’s how they get paid, since they get a percentage on those deals. They are enablers, not enforcers.
We need real consumer protection and enforcement penalties that keep up with the times, not that trail behind the clock and companies after the damage is done. How about the Biden administration corralling these influencers, hawkers, and hustlers and their paymasters with the full weight and authority of the law to create confidence in the truth and stop the monetization of misinformation?