Of all the ways there are to get in trouble blogging, one I don’t think we’ve talked about at all here on Blog Law Blog is violating federal securities law.
Rapper 50 Cent may have come close to that in the last several days. He unleased a series of tweets that encouraged his Twitter followers to buy into a penny stock he owned.
It looks like the stock was about 4.5 cents a share before the tweets started. It then skyrocketed to a peak of 32 cents about 4 days later. According to reports, that netted 50 Cent around $9 million – at least on paper.
But apparently he hasn’t cashed in. And that, according to one Denver law firm’s blog, means he probably hasn’t run afoul of the law.
Shares have now leveled out at around 28 cents a share. While that’s off its peak, it’s still way, way up from where it was.
The stock, HNHI, is a business that distributes Fiddy’s headphones, which are apparently chasing the success of Dr. Dre’s own brand of cans.
According to Chris Barth on the Forbes blog Between the Lines, 50 Cent’s Twitter feed included:
- “HNHI is the stock symbol for TVG sleek by50 is one of the 15 products this year. If you get in technically I work for you. BIG MONEY”
- “TVG’s stock went from 5cent to 10 in one day. You can double your money right now. Just get what you can afford.”
- “HNHI is the stock symbol for TVG there launching 15 different products. they are no joke get in now.”
- “You better get in now TVG I’m never saying this again. Watch how this company blows up.”
- “Ok ok ok my friends just told me stop tweeting about HNHI so we can get all the money. Hahaha check it out its the real deal. ”
Then, at a point at which Barth suspects 50 Cent got some legal advice, those tweets were deleted. Then some new tweets:
- “I own HNHI stock thoughts on it are my opinion. Talk to financial advisor about it”
- “HNHI is the right investment for me it may or may not be right for u! Do ur homework”
From @tweetlawtweets …
50 Cent pumps stock w/ tweets, makes ~$9m, then deletes and starts tweeting disclaimers. Bottle fulla bub or SEC “hug”? http://is.gd/7YC20m