The recent cryptocurrency meltdown has brought its share of troubles for investors and for trading firms like FTX and its techbro CEO Sam Bankman-Fried. But one other group has also felt the heat. Usually isolated from the fallout of product and service failures, celebrity spokespeople for cryptocurrency are now taking heat. Public figures like football player Tom Brady are being sued in a class-action lawsuit that alleges they helped promote the sale of unregistered securities in the form of yield-bearing FTX accounts.
Do We Truly Believe Celebrities Know What They’re talking About?
The law suit states, “Celebrities have a moral and legal obligation to know that what they are promoting is unlikely to cause physical or financial damage to customers.”
Really?
Should celebrities be held liable if the products they promote fall short of expectations? Famous people gain notoriety because they know how to throw footballs, cry on cue and carry a tune. Why should having these skills lead us to believe they also understand complex financial products, let alone the cars, cereals and pain relievers they push? And can we sue them if the goods and services they promote disappoint, harm or bankrupt us?
Consider these examples:
Are These People Really Experts?
Charlie Sheen appeared in advertisements for the Fiat Abarth, a sporty Italian car. Both Sheen and Fiat are well known for breakdowns. If I buy a Fiat, can I sue him when I have to spend unexpected thousands for repairs and maintenance? Or did Fiat absolve itself by sending a coded disclaimer, employing a celebrity known for dubious behavior to promote a car known for dubious reliability?
Pete Davidson has taken a prominent role in promoting fast food purveyor Taco Bell. What if eating their tacos and burritos exacerbates my ulcerative colitis? Do I have a case against Pete?
Philadelphia Eagles quarterback Jalen Hurts has appeared in an ad with Tony the Tiger, himself a famous (if fictitious) celebrity. Suppose I am wooed by an athlete’s (or cartoon tiger’s) endorsement and I buy and overeat these sugar bombs in a bowl. If I then end up with metabolic syndrome and type 2 diabetes, can I sue both Jalen and Tony?
Shaquille O’Neal appears in ads for pizza, pain relief products, printers and man-boosting pills. Is it plausible he’s an expert in all those products? Pizza maybe…
Let the Buyer Beware
About two thousand years ago, the Romans gave us this warning: caveat emptor (let the buyer beware). Translation: consumer, do your homework. Don’t expect that a celebrity endorser has done his or hers. When Tom Brady tells me he’s prepared to play a good game, I believe him. He’s a football expert. If he then throws three interceptions and his team loses by four touchdowns, perhaps I can sue him for the price of my ticket, my parking and my stadium food.
I probably can’t sue him for the value of the cryptocurrency I used to buy them.
