SEC Is On The Look Out For Touts

Last week, the Securities and Exchange Commission announced settled charges against professional boxer Floyd Mayweather Jr. and music producer Khaled Khaled, known as DJ Khaled.  Notably, the SEC's orders did not use the words "false", "misleading" or "omission".  Instead, the SEC relied on Section 17(b) of the Securities Act which makes it unlawful 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."

In a word, the SEC targeted "touting" without disclosure of the receipt of consideration.  

The English verb "tout" should not be confused with the French adjective "tout".  The English verb is derived from the Middle English tuten which means to spy or look out for.  The French adjective translates as "all" as when the Duke of Orleans exclaims in Henry V: "O seigneur! le jour est perdu, tout est perdu!" (O Lord, the day is lost, all is lost).