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Did Ashton Kutcher Break The Law By Guest-Editing Details Magazine?

Submitted by on August 22, 2011 – 8:51 amNo Comment
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OOPS! That’s what Ashton Kutcher—and the editors at Details magazine—must be thinking right now. Just a few days after putting out a special online-only issue of Details that’s guest edited by Kutcher, the Federal Trade Commission announced that the new star of Two and a Half Men could be facing some pretty serious charges against him because of it.

Why? Well, the issue of Details—dubbed “The Social Issue”—features Kutcher focusing in on a variety of different companies and brands and endorsing them in one way or another. No problem, right? Except that Kutcher owns a stake in a number of the different companies that are featured in the issue—a fact that he fails to mention in his editor’s letter or anywhere in the issue really. So if any of those companies start trading publicly anytime in the near future, Kutcher could face charges and the Securities and Exchange Commission could get involved with an investigation as well.

The issue here is that Kutcher promoting the companies in question without revealing his ties to them is illegal. By promoting the companies, he’s essentially encouraging people out there to invest in them, which is all well and good provided that those same people know that Kutcher is already invested in them. Otherwise, there’s a pretty clear conflict of interest that occurs when Kutcher name-drops the companies and gets people excited about them. It’s a practice that’s frowned upon and could warrant further investigation by the FTC and SEC.

For now, Kutcher isn’t apologizing for his actions and Details isn’t too worried about the backlash they’re receiving. “If you read Ashton’s editor’s letter, you’ll see he succeeded in his mission to get people to talk about and even criticize this social issue,” Details editor-in-chief Dan Peres said in a statement that was released on Friday. “I stand by how we communicated Ashton’s involvement with some of the companies included in our coverage and remain extremely proud of the work we did on this project.”

But the incident puts a spotlight on a recent trend amongst celebrities who buy up shares in companies. Earlier this year, 50 Cent started sending out tweets about a hot stock tip that he’d received and urged his Twitter followers to invest in the company. However, it was later revealed that Fif owned a portion of the company and, while he made a boatload of cash at the time, he caused a lot of people to lose money on the investment because the price of the stock he was promoting plummeted the week after he stopped promoting it. Like Kutcher, he too caught the attention of the FTC and SEC at the time, who launched a short investigation and looked into 50′s affiliation with the company.

Basically, celebrities need to be careful when it comes to what they’re promoting and how they’re promoting it. Back in the day, celebrities didn’t own large stakes in companies like they do now. But over the years, celebrities have made more and more money and they’ve invested it into new companies, especially those companies operating in the technology field. And while it’s fine for them to promote these companies, just like they would any other company, they need to disclose the fact that they own a company before they decide to promote it. Otherwise, they could be breaking the law and they could land themselves into a whole lot of hot water.

Maybe that was the point of the Details snafu. Or maybe Kutcher just needs to be a little more careful in the future.

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