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In many ways the limits on commercial speech make sense, we don't want people selling snake oil claiming it is the cure for cancer. Certainly that is an extrem

In many ways the limits on commercial speech make sense, we don't want people selling snake oil claiming it is the cure for cancer. Certainly that is an extreme and doesn't suggest the same is true of good-faith product endorsement on IG without disclosure, but the same potential for abuse exists, especially on highly regulated products that have very specific advertising regulations (i.e. alcohol and tobacco) that might be advertised in good faith. I think one of the most bizarre applications to date is the Martha Stewart case. During her insider trading case, she actually picked up new charges for securities fraud because throughout the insider trading case she continually proclaimed her innocence. Now I think if Free Speech protects anything, it should protect our ability to proclaim our innocence publicly when the government charges us with a crime; however, the new charges alleged she proclaimed her innocence with the specific intent of artificially and fraudulently propping up the stock of the Martha Stewart company. These new charges carried up to 20 years, but ultimately the prosecutors dismissed them when she was found guilty and sentenced for the insider trading charges. It would have been a very interesting case from a legal perspective.

tuna-piano 10y ago
Wow, this is quite interesting to think about. 1- If your company had an asset (Martha Stewart's brand) that you know is about to become a lot less valuable, saying "the asset will not become less valuable", when you know that to be a lie, should be considered fraud. 2- clearly, if charged with a crime, you have a right to speak out and proclaim your innocence. Two fundamental things that are opposed to each other. Which should win out?
- akiselev 10y ago
  IANAL but it seems to me that free speech always loses to fiduciary responsibility and SEC disclosure requirements because those are all responsibilities you pick up with your own free will.
- superuser2 10y ago
  >you have a right to speak out and proclaim your innocence. This isn't so clear. You have a right to not proclaim your guilt, but you exercise that right by not speaking. The right against self-incrimination does not permit lying. The law has long recognized certain situations in which you're not allowed to lie - while making sworn testimony, while being interviewed by federal investigators, etc. People can and do go to jail for lying to the effect of "I didn't do it" even if the trial on the original charge doesn't result in a conviction. Speaking to the public in a way that influences securities prices is another one of those situations where lying is illegal.
  - tuna-piano 10y ago
    Wow, any link to going to jail for "I didn't do it"? That almost seems like double jeopardy to me.
    - superuser2 10y ago
      Scooter Libby is a big one in the last few years. His underlying crime was disclosing classified information, but he wasn't convicted of that - he was convicted for the story he told denying it. https://en.m.wikipedia.org/wiki/Scooter_Libby https://en.m.wikipedia.org/wiki/Scooter_Libby
      - comex 10y ago
        One could draw a difference between lying about concrete facts, as Libby did, and merely proclaiming innocence in general. Though in some cases they may be difficult to distinguish.
        nickff 10y ago
        If I were to question you repeatedly over a period of months about the same events (which were not particularly significant to you), I would expect some inconsistencies in your version of events, even if you were trying to be truthful.
      - 10y ago
deleted 10y ago
[deleted]
gjem97 10y ago
FWIW, she was convicted of obstruction of justice and lying to investigators, not insider trading, but I think that even furthers your point about derivative charges. http://money.cnn.com/2004/03/05/news/companies/martha_verdict/ http://money.cnn.com/2004/03/05/news/companies/martha_verdic...
- will_brown 10y ago
  Yes you are right. To be more accurate, I should have said convicted of some of the charges on the underlying insider trading case not the insider trading charges (as you note, not for the actual count of insider trading itself but the accompanying charges). I may have subconsciously done that because the counts she was convicted of blur with new charge and I wanted to distinguish the underlying case/charges with the new charge which was triggered by claiming innocence of the underlying case.

tuna-piano 10y ago

Wow, this is quite interesting to think about. 1- If your company had an asset (Martha Stewart's brand) that you know is about to become a lot less valuable, saying "the asset will not become less valuable", when you know that to be a lie, should be considered fraud. 2- clearly, if charged with a crime, you have a right to speak out and proclaim your innocence. Two fundamental things that are opposed to each other. Which should win out?

akiselev 10y ago
IANAL but it seems to me that free speech always loses to fiduciary responsibility and SEC disclosure requirements because those are all responsibilities you pick up with your own free will.
superuser2 10y ago
>you have a right to speak out and proclaim your innocence. This isn't so clear. You have a right to not proclaim your guilt, but you exercise that right by not speaking. The right against self-incrimination does not permit lying. The law has long recognized certain situations in which you're not allowed to lie - while making sworn testimony, while being interviewed by federal investigators, etc. People can and do go to jail for lying to the effect of "I didn't do it" even if the trial on the original charge doesn't result in a conviction. Speaking to the public in a way that influences securities prices is another one of those situations where lying is illegal.
- tuna-piano 10y ago
  Wow, any link to going to jail for "I didn't do it"? That almost seems like double jeopardy to me.
  - superuser2 10y ago
    Scooter Libby is a big one in the last few years. His underlying crime was disclosing classified information, but he wasn't convicted of that - he was convicted for the story he told denying it. https://en.m.wikipedia.org/wiki/Scooter_Libby https://en.m.wikipedia.org/wiki/Scooter_Libby
    - comex 10y ago
      One could draw a difference between lying about concrete facts, as Libby did, and merely proclaiming innocence in general. Though in some cases they may be difficult to distinguish.
      - nickff 10y ago
        If I were to question you repeatedly over a period of months about the same events (which were not particularly significant to you), I would expect some inconsistencies in your version of events, even if you were trying to be truthful.
    - 10y ago

deleted 10y ago

[deleted]

gjem97 10y ago

FWIW, she was convicted of obstruction of justice and lying to investigators, not insider trading, but I think that even furthers your point about derivative charges. http://money.cnn.com/2004/03/05/news/companies/martha_verdict/ http://money.cnn.com/2004/03/05/news/companies/martha_verdic...

will_brown 10y ago
Yes you are right. To be more accurate, I should have said convicted of some of the charges on the underlying insider trading case not the insider trading charges (as you note, not for the actual count of insider trading itself but the accompanying charges). I may have subconsciously done that because the counts she was convicted of blur with new charge and I wanted to distinguish the underlying case/charges with the new charge which was triggered by claiming innocence of the underlying case.