The headline in today’s paper read “Celebrities could be fined for financial endorsement”. The article goes on to say “Celebrities who endorse financial products could face huge fines, but only if they make false statements in doing so.” So what has changed?
Three finance companies fronted by high-profile New Zealanders collapsed each owing millions of dollars.
He says he now regrets his role and says he lost a large amount of money himself in the collapse of the company.
In March Long was quoted :
He believed celebrities would now shy away from such work. “If that’s the intent then probably it will work.”
However, he believed it was “a bit unfair” to hold celebrities responsible for investment losses on products they endorsed when it was unlikely they would ever know exactly how sound the company they were endorsing was.
And with that remark, he tells us much about celebrities who endorse products and their knowledge of the soundness of the companies they promote.
Did he really know enough about the working of the company to front it?
And of course, there was that all time great Colin Meads, former All Black and hailed as “our nation’s most revered All Blacks legend of all time”. Sir Colin (as he now is) famously described Provincial Finance as “solid as, I’d say”.
These names may not mean anything to those reading this who do not live in our green and beautiful land, but they are every day, household names to us. And because of their high profiles I suggest that many people were convinced to put their money in these companies. I am not in any way suggesting that any of these men had anything to do with the collapse of the companies. The directors of each of these companies are currently facing court proceedings over this.
While it has been made it clear that the primary responsibility for accuracy will fall on company directors, the planned law targets high-profile individuals who use their status to promote financial products to the public.
So to anybody considering being the front, the voice over or the spokesperson for one of the finance companies, I would say beware.
And there are of course ‘celebrities’ fronting companies other than those in the finance arena, and one wonders whether they could also be caught in some new laws, yet to be enacted, should the company fail or fail to deliver.
The law relating to untrue statements already allows for financial penalties, as well as compensation for anyone who loses money on an investment made on the strength of an expert’s advice. I wonder just what one has to do to prove that the investment was made solely on the advice of the expert.
“We have to live today by what truth we can get today and be ready tomorrow to call it falsehood.” ~William James, 1842 – 1910)
pioneering American psychologist and philosopher