Replies to post #17874 on Element Global Inc (ELGL)

[janice shell]

Yes, if a promoter is promoting a company, in email blasts, or with reports on his website or whatever, he's supposed to disclose the amount and kind of his remuneration. Did he get stock? Did he get cash? Did he get both?

The SEC insists that they must also identify the payor. A year or two ago, a couple of promoters pointed out in a pleading in an SEC suit brought against them that 17(b) doesn't require that. I don't know how it turned out. But my own reading of the section is that it doesn't, though it should.

[1manband]

I always thought that the amount of compensation was required

It is.

"(b) It shall be unlawful for any person, by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, to publish, give publicity to, or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof."

https://www.sec.gov/about/laws/sa33.pdf

Someone who does not disclose the amount of the compensation received for promoting a stock is breaking the law. Incorporation by reference to another party's document does not satisfy the law. The recipient must disclose the amount themselves.