Without plagiarizing, I found the following article interesting:
http://www.ibtimes.com/articles/99665/20110111/50-cent-hustler-entrepreneur-innovator.htm#
Essentially, 50 Cent tweeted about a company that he owns stock in urging people to buy it. The market responded, and now he's tripled his money. Are there any security or legal issues with this? Is he even treading a thin line?
There are obviously lots of complexities here, and there are rules against price or market manipulation that are somewhat interpretive due to the rules' inclusion of the manipulator's intent, but:
Generally speaking, you can publicly promote the value of a company whose stock you own provided that you:
Now, if you extol the value of a company publicly, and sell it immediately thereafter, "pump and dump," the regulators might suggest that your actions imply that you didn't believe it was so wonderful, and were misleading the public to move the price. That said, a fair retort might be that you loved it for all the reasons you said at [lower price], but thought it had run its course once it got to [higher price]. Again, if it can be demonstrated that your reason for praising it was to push the price higher, your intent may land you in hot water.
This isn't legal advice or a full analysis, but if Fitty essentially declared his honest reasons for loving a stock in which he is invested, and discloses that investment, letting others know he is biased, he's probably ok, especially if he intends to hold it long term.
Yes, there are legal problems with what he did.
To prevent fraud, the US government regulates who can give public investment advice and how they can do it. If you're getting paid to advise an individual, you have to pass certain examinations and maintain ongoing government certification. If you hold a position in a stock you're touting, you legally have to disclose it using particular language. And if you're a corporate insider or hold a significant position in a company, you're restricted on what you can say about the company and when you can say it.
Mr. Jackson, aka 50 Cent, held a significant position in the company he tweeted about. My guess is the guys in the suits came to visit Mr. Cent, because if you go to the article the OP links to, at the bottom they mention Mr. Cent's tweet has been deleted and replaced with "go talk to your investment advisor".
"pump and dump" is a common Illegal practice of boiler room operations. It refers to the talking a stock up, both through word of mouth as well as selling shares to unwitting buyers. I fail to see much difference between that practice and this.
If he didn't lie, I don't see the issue. He did not force anyone to buy anything. His opinion was stock X is good, he publicized it and it turned out to be true (at least temporary) - what's wrong with it? It is customary for people who have either fiduciary duty towards the clients or are perceived as independent analysts to disclose their interest and potential conflict of interest, lest they lose the respect of the public as independent and trustworthy sources of financial information. Jackson never had that, express or implied, and never had the duty to provide anybody with impartial financial analysis, so he can say anything he wants. He can invest into the company and promote it and make money from it - isn't it what was called "business" once? Why is it even being questioned?
