Because it is my schtick, people often send me fact patterns and ask “is this securities fraud?” Curiously, although my schtick is literally “everything is securities fraud,” my answer to these questions is often “no.” Most things that don’t seem like securities fraud are securities fraud, but some things that do seem like securities fraud aren’t. But this is never legal advice.
Also people sometimes give ChatGPT fact patterns and ask “is this securities fraud?” Probably don’t do that? Here’s a TechCrunch article from last week:
The $7 million in annual recurring revenue that Cluely co-founder and CEO Roy Lee shared with TechCrunch last summer was a lie, Lee admitted on Thursday on X. Wrote Lee, this “is the only blatantly dishonest thing i’ve said publicly online, so this is my formal retraction.”
Several people sent me Lee’s posts on X, which are (as someone posted) “the most @matt_levine coded thing to have ever happened”: Lee apparently asked ChatGPT “got a call from some tech crunch reporter asking about revenue. told them 7m arr in reality 6.3m run rate. is this securities fraud,” ChatGPT replied “almost certainly not,” and Lee posted the exchange with the comment “ngl i was sweating for 2 mins.” A verified X account with Elizabeth Holmes’s name on it (!?!?!?!!??) replied “I wouldn’t trust AI with this one.”
There are various not-best-practices things here, but I think I agree with ChatGPT? (Really not legal advice!)….
Source: “Is this securities fraud?”