Will the SEC Bust Facebook for Drugs?

Will the SEC Bust Facebook for Drugs?

Everything is securities fraud

It is illegal to sell illegal drugs. (Obviously.) It is illegal to operate an online marketplace for illegal drugs; ask the Silk Road guy. But “online marketplace for illegal drugs” is a vague and general description; really any internet service that allows users to create their own content could be used as an online marketplace for illegal drugs. You could try to offer drugs for sale on eBay or Etsy or Twitter or LinkedIn or WeChat or Discord or Slack or Zoom or Goodreads or Google Hangouts or, and let me be clear that I do not condone this, the comments section of Money Stuff. Type in the box “I’ve got some kind bud for sale,” someone types in the box below it “I want some,” you type “okay where are you,” they type their address, you go meet them with the drugs, boom, online marketplace for illegal drugs. There are so many places on the internet where you can type in a box.

Facebook is a big one. If you’re selling something and want to reach the broadest possible audience (not necessarily a great idea for drug dealers!), Facebook is where everyone is, so you might post your ad for illegal drugs there. Or on Instagram, also operated by Facebook Inc., where you can post a nice picture of the drugs.

It is, however, mostly not illegal to operate Etsy or Twitter or the Money Stuff comments or Facebook, even if sometimes people post ads for illegal drugs there. The U.S. has a broad and sensible policy of not holding general internet platforms legally responsible for the stuff that users post on them, so if you are not trying to run a drug market, and if you do a reasonable job of taking down any drug content that anyone points out to you, you are probably fine. (Not legal advice!)

Not everyone is happy about this. You might say: Yes, it is legal for Facebook to host the occasional illegal drug sale, but I want it to be illegal. What can you do? What recourse is there for you, if something is legal but you think it should be illegal? Well I don’t know you could call your congressperson or whatever, but here in America in 2020, or at least here at Money Stuff, we have a more efficient, weirder answer. You could sue for securities fraud.

Source: Bloomberg

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