The Potential Fall Out From 50 Cents' Tweet About H&H Stock

NEW YORK, Jan. 13, 2011 /PRNewswire/ -- Rapper 50 Cent's recent Tweet from the floor of a trade show, where his "Sleek by 50" headphones were being shilled, points to the challenges that marketers and regulators encounter daily in a social media context.  The impact of the Tweets, encouraging his followers to buy stock, is the cause for concern. His followers on Twitter acted on his Tweet.  They bought stock in the publicly held company, enough to set off a wave of comment on his behavior and to bring to light that he, in fact, owns a substantial stake in that company.

According to Tom Chernaik, CEO of CMP.LY, "This is a classic example of a shrewd entrepreneur using social media to get the word out about something that they believe in; and in this case, have a personal financial stake in.  Unfortunately, without knowing it, by virtue of those Tweets, 50 Cent is now in the crosshairs of a great online debate. The use of social media promotion to raise the share price of a fledgling company is certainly a concern, not necessarily from SEC regulations but, rather, under the FTC Guidelines for Testimonials and Endorsements. The guidelines, updated in late 2009 require endorsers to disclose when they have material connections to the brands and products that they promote. In this example, there certainly seems to be a connection that might come as a surprise to the average reader."  

Chernaik added, "Compliance with the guidelines in Twitter and other digital platforms does not need to be complex. CMP.LY provides a disclosure framework that is simple to use and easy to understand, allowing users to manage process and regulatory compliance in all forms of social media marketing with documented audit trails.  CMP.LY enables users to make clear and conspicuous disclosure statements in relatively few characters with an identifiable URL in a text-based environment such as SMS, Tweet or Facebook status update; or with a visual icon in a web page, blog post or HTML-based environment."

The FTC has been out the forefront of these issues.  The Commission issued updated guidelines in late 2009 covering endorsements and testimonials in social media and word of mouth marketing. This applies to advertisers, as well as to their employees, agencies and influencers, who can all potentially be liable for a lack of disclosure in their communications.

CMP.LY has set the industry standard for social media compliance.  CMP.LY codes and icons serve as clear disclosure on their own and also provide direct links that are identifiable and readable in context, and point back to complete disclosures as required for regulatory needs and documented best practices.  CMP.LY's patent-pending system is the first and only commercial solution to address the unique challenges of disclosures in social media. CMP.LY makes it easy for advertisers to ensure that blog posts, Facebook updates and even Tweets can meet disclosure obligations under FTC and, soon, FDA, SEC and other regulations. The company also provides tools to document and report on compliance and measure social media influencer campaign-specific Return On Investment (ROI).

SOURCE CMP.LY