Venture Capitalists With Powerful Blogs May Run Afoul of the SEC
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Re: Venture Capitalists With Powerful Blogs May Run Afoul of the SEC
#2Does this apply to folks with personal blogs like Fred Wilson and Mark Suster or just big corporate blogs like TechCrunch and GigaOm?
Re: Venture Capitalists With Powerful Blogs May Run Afoul of the SEC
#3Does this apply to folks with personal blogs like Fred Wilson and Mark Suster or just big corporate blogs like TechCrunch and GigaOm?
It should apply to either, especially if they're using the blog to get more investors.
Re: Venture Capitalists With Powerful Blogs May Run Afoul of the SEC
#4Does this apply to folks with personal blogs like Fred Wilson and Mark Suster or just big corporate blogs like TechCrunch and GigaOm?
Mr. Ferrara explained, “When an investor or insider is engaged in an omission which proves to be a deception, and the result of that was a financial loss to another investor, a case for fraud can be made.”
That applies to any investor or insider, regardless of where they speak publicly. So, it applies to Fred Wilson, Mike Arrington, and any other investor.
Re: Venture Capitalists With Powerful Blogs May Run Afoul of the SEC
#5Does this apply to folks with personal blogs like Fred Wilson and Mark Suster or just big corporate blogs like TechCrunch and GigaOm?
It should apply to either, especially if they're using the blog to get more investors.
So is it a problem that Fred Wilson blogged for months about Kickstarter before revealing that he was an investor?
Re: Venture Capitalists With Powerful Blogs May Run Afoul of the SEC
#6Does this apply to folks with personal blogs like Fred Wilson and Mark Suster or just big corporate blogs like TechCrunch and GigaOm?
Mr. Ferrara explained, “When an investor or insider is engaged in an omission which proves to be a deception, and the result of that was a financial loss to another investor, a case for fraud can be made.” That applies to any investor or insider, regardless of where they speak publicly. So, it applies to Fred Wilson, Mike Arrington, and any other investor.
So Fred Wilson and co. are fine as long as they do not "deceive"? I suppose that still exposes them to the possibility that they might have to defend themselves to prove that they have not "deceived"? Ah, the perils of the internet age. I wonder if general liability insurance policies cover those types of claims?
Re: Venture Capitalists With Powerful Blogs May Run Afoul of the SEC
#7Earlier quoted context omitted.
It should apply to either, especially if they're using the blog to get more investors.
So is it a problem that Fred Wilson blogged for months about Kickstarter before revealing that he was an investor?
I'm not a lawyer or an SEC examiner, but I think securities fraud requires an overt fradulent claim, not simply the omission of potential benefit. Had Wilson been pimping Kickstarter as a profitable company (rather than merely a really cool idea) then it might be fraud.
Re: Venture Capitalists With Powerful Blogs May Run Afoul of the SEC
#8Re: Venture Capitalists With Powerful Blogs May Run Afoul of the SEC
#9This really applies to anyone engaged in communication about a company in which they have a financial interest, doesn't it? If you take language like:
When an investor or insider is engaged in an omission which proves to be a deception, and the result of that was a financial loss to another investor, a case for fraud can be made.
As stated, at least, that seems like it would also apply to founders' blogs, or even founders' posts on HN.
Re: Venture Capitalists With Powerful Blogs May Run Afoul of the SEC
#10Does this apply to folks with personal blogs like Fred Wilson and Mark Suster or just big corporate blogs like TechCrunch and GigaOm?
Personal blogs like Fred Wilson's and Mark Suster's are less hype driven and more content driven. A TON of their content is geared towards providing the startup community and aspiring entrepreneurs with valuable information. Their content is derived from their personal experiences - the companies they invest in, advise and have created themselves - and this is why reading them is valuable. They never claim to be or are never perceived to be neutral news sources.
Blogs like TechCrunch and GigaOm are more journalistic in nature - their goals and the public's perception of them is as a news source. There are certain responsibilities and standards that need to be upheld when you are a source of news that don't apply to personal blogs.