Patriots football fan Michael Livieratos is doing something that would once have been considered blasphemy in New England. he sued former Patriots quarterback Tom Brady. Livieratos, 56, filed a lawsuit seeking unspecified damages from Brady and “Shark Tank” co-host Kevin “Mr. Awesome” to O’Leary for their marketing of FTX and crypto currency.
Livieratos essentially argues that the defense attorney’s disclosure ruined him after he invested virtually his life savings in FTX before it collapsed. Putting aside his decision to base financial decisions on advertisements made by an athlete, Livieratos’ lawsuit raises difficult questions about the liability of celebrities who become paid spokespeople for companies.
Brady is not alone. Other celebrity supporters are also on trial, including his ex-wife, supermodel Gisele Bundchen.
There is no doubt that celebrities can sell their fans by promoting products based on little knowledge or competence. However, the question for consumers is whether being a jerk is the same as being a victim.
Livieratos told the Washington Post that “as a New England Patriots fan my whole life, you can imagine the impact Tom Brady will have.” One can certainly imagine how a celebrity might prompt you to buy a car to look as good as, say, Matthew McConaughey. However, few of us would bet our life savings on his financial advice. Indeed, if my Lincoln were a lemon, I wouldn’t blame McConaughey for not having the car in “my sweet spot.”
Indeed, McConaughey personifies the problem in these court proceedings. He says a few words in each ad, and almost nothing about Lincoln’s capabilities. In one, she simply grins before falling back, fully clothed, into the pool. You had to look closely to know that he was selling cars; McConaughey was selling McConaughey, and the car was just an add-on.
No one thought McConaughey took the car apart or compared other cars before driving truckloads of advertising money. The question is whether one can assume that Brady did more research before telling people to dive into cryptocurrency.
However, according to the complaint, O’Leary and Brady “suggested, supported and actively participated” in FTX’s “offer and sale of unregistered securities.” He is accused of “aggressively marketing” FTX’s alleged “deceptive” practices.
Brady, along with his ex-wife, took an interest in FTX last year and agreed to donate millions of dollars to FTX’s mission of effective altruism. Notably, it appears that Brady and O’Leary may be losing money on the company as well.
Earlier group action: Sam Bankman-Fried, Tom Brady, Gisele Bundchen, Stephen Curry, Golden State Warriors, Shaquille O’Neal, Udonis Haslem, David Ortiz, William Trevor Lawrence, Shohei Ohtani, Naomi Osaka, Lawrence Jin named David and Kevin : O’Leary as accused.
The class action alleges that “some of the biggest names in sports and entertainment have either invested in FTX or served as brand ambassadors for the company. Several of them promoted FTX to their social media fans, promoting retail consumer adoption of the fraudulent FTX platform.”
The lawsuits allege that these celebrities helped create a “house of cards” that operated as a “Ponzi scheme where FTX entities commingled customer funds” to perpetuate the fraud.
States like Texas are also investigating Brady and others for their roles in the allegedly fraudulent company.
Brady hired Latham and Watkins to represent him in these legal proceedings.
I am highly skeptical of theories of responsibility. There is no evidence that these celebrities knowingly lied. These commercials also raise another issue with actor Ryan Reynolds’ portrayal of Mint Mobile as the owner; he doesn’t just make, he manufactures the product.
Celebrities regularly endorse products from hair gel to hamburgers. They read from scripts and few would believe they are experts in the product they are making.
These ads clearly include a personal endorsement that they are good and decent. Tom Selleck can be seen every night on TV performing AAG with the enthusiasm of a carnival barker; Or worse, that it was some way to take you home.”
There is no indication that AAG is fraudulent or that Selleck is wrong to claim that he “thinks I know what” about reverse mortgages. However, even if Selleck eventually relinquishes his “whatever” as “whatever,” the question should be his credibility, not his liability.
However, some celebrities have settled similar cases in the past. In 2018, the Securities and Exchange Commission (SEC) prosecuted former boxing champion Floyd Mayweather Jr. and music producer DJ Khaled for their roles in initial coin offerings. They agreed to pay the profits, penalties and interest associated with their promotion.
Similarly, the SEC this year settled with TV star and businesswoman Kim Kardashian for promoting the EthereumMax (EMAX) crypto token without disclosing the payment she received. He paid $1.26 million without admitting guilt.
For Kardashian, the main difference is the wire disconnection of the stock product as opposed to the plain product. Most products fall within the US Federal Trade Commission (FTC) approval guidelines. It only requires “plain and unequivocal language” indicating that commercial advertising is part of an “advertising” or “sponsored” feature.
Notably, Kardashian labeled her EthereumMax post as an “advertisement,” but the SEC considers the crypto asset a security, not another commodity. Under SEC rules, a celebrity promoting crypto-asset security must disclose the nature, source, and amount of compensation received for the promotion.
Kardashian captures celebrity endorsement madness. The Kardashians are popular culture’s famous Slurpees, an entertainment option with zero nutritional value. They are a family that became famous by claiming to be famous, with no significant skill or worth other than being famous.
For someone to take investment advice from Kim Kardashian is the ultimate example of a fool and their money soon to be parted with. Whose fault is it, though, when you make a Kardashian or Brad your financial advisor based on a 30-second commercial?
We live in a celebrity-dominated culture. Despite our progress as a species, more people may know and follow Kim Kardashian’s advice than the Dalai Lama. Indeed, few of us want to imagine the Dalai Lama in Lululemon yoga pants, and I suspect that could lead to a buying frenzy.
Ultimately, though, celebrities sell themselves, and the rule for consumers remains “warning” or “buyer beware.”
Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University. Follow him on Twitter @JonathanTurley:.