Message boards and social platforms can move thinly traded and microcap stocks quickly. That speed is exactly why the U.S. Securities and Exchange Commission (SEC) pays close attention to stock promotions on venues such as InvestorsHub (iHub), Stocktwits, Seeking Alpha, and Investor Village.
The biggest compliance issue is simple — if a post is “paid promotion”, readers must be told, clearly and specifically.
When are message board posts “stock promotion”?
On message boards and social apps, “promotion” is broader than classic advertising. In practice, the SEC and plaintiffs’ lawyers focus on whether the communication is designed to create interest or buying pressure in a security, especially when it appears to be independent commentary.
- Bullish “DD” threads, price-target posts, or “catalyst” countdowns
- Reposting press releases with added hype or selective highlights, “I’m not paid” or “just sharing” language that conflicts with an actual compensation arrangement
- Coordinated posting across multiple accounts to simulate organic buzz
- Publishing long-form articles (e.g., on Seeking Alpha or similar outlets) that read like independent analysis but are sponsored or compensated
The key rule for paid posts: Securities Act Section 17(b) (the “anti-touting” provision)
Section 17(b) of the Securities Act of 1933 generally makes it unlawful to publish or circulate a communication describing a security for consideration received (or to be received) from an issuer, underwriter, or dealer unless the promoter fully discloses the receipt of that consideration and the amount. In plain language: if you are paid to talk up a stock, you must say you are paid and how much you were paid.
This issue comes up constantly in microcap and small-cap “awareness” campaigns, sponsored “research,” influencer posts, and IR-driven social media activity. SEC actions and orders have repeatedly emphasized that even short posts can trigger 17(b) obligations.
What “full disclosure” should include
- Who paid (issuer name or the specific third party)
- What form of compensation (cash, shares, options, warrants, other benefits)
- How much (dollar amount and/or number of shares/options)
- When and for how long (engagement term; whether compensation is ongoing)
- Whether the promoter (or its principals) may buy or sell the security (if true)
Why “may be compensated” is a common pitfall
A vague statement like “may have been compensated” is risky when compensation is actually known and specific. Best practice is to disclose the specific issuer and the specific amount (or exact share count), rather than using generalized language or a generic “see our website” statement.
SEC anti-fraud provisions that frequently intersect with promotion
Even with perfect 17(b) disclosure, posts can violate anti-fraud rules if they are misleading or part of manipulative conduct:
- Exchange Act Rule 10b-5: prohibits schemes to defraud and material misstatements or omissions in connection with the purchase or sale of securities.
- Securities Act Section 17(a): prohibits fraud in the offer or sale of securities.
- Exchange Act Section 9(a)(2): targets price manipulation and conduct designed to create a false appearance of active trading or to induce trading.
Examples of risky promotional behavior
- Stating or implying “inside information,” “guaranteed” returns, or certainty about imminent deals
- Cherry-picking only positive facts while omitting known negative information, making the post misleading
- Sharing non-public information (MNPI) obtained through the issuer or its agents
- Coordinated posting designed to create artificial volume or a false sense of market interest
- Posting while simultaneously selling into the price/volume increase (“scalping”), especially if not disclosed
Platform notes: InvestorsHub, Stocktwits, Seeking Alpha, Investor Village
- Short-form posts (Stocktwits, iHub, Investor Village): you have less space, but 17(b) still requires clear disclosure. Put the key disclosure in the post itself; link out only as a supplement.
- Long-form content (Seeking Alpha-style articles): if content reads like independent research, disclosure needs to be prominent, unavoidable, and precise (who paid + amount + nature of relationship).
- Threads and reposts: a disclosure that appears only once may be separated from later reposts, screenshots, or quote-tweets. Repeat disclosures in each materially promotional post.
How paid investor relations firms can protect themselves
1) Contract and compensation hygiene
- Use a written contract identifying the exact payor (issuer or third party), services, term, and compensation (cash/equity).
- Avoid transaction-based compensation (e.g., success fees tied to capital raised) without broker-dealer analysis; SEC guidance repeatedly flags transaction-based compensation as a strong indicator of broker status.
- Track all payments and equity transfers to ensure the “amount” disclosure is accurate as of the date of each post.
2) Content Controls
- Pre-clear promotional copy (especially microcap campaigns).
- Require source citations internally (EDGAR filings, press releases, investor decks) to support factual claims.
- Ban superlatives and “can’t miss” language; write in a measured tone. No MNPI: do not share anything non-public, even if the issuer “okays” it.
3) Trending and conflict controls
- Consider blackout windows for employees posting about the issuer (to reduce scalping optics).
- Maintain a conflicts log for any holdings by the firm or its principals (and disclose if applicable).
- Keep records: screenshots/exports of posts, edits, timestamps, and the disclosure language used.
Disclosures and disclaimers for message board posts (practical templates)
Below are sample disclosures. They must be customized to the actual facts (issuer/payor, form of compensation, amount, and term). A link to a full disclaimer page is helpful, but it should not replace a clear in-post disclosure.
A) Minimum in-post 17(b) disclosure (short-form)
Paid Promotion / 17(b) Disclosure: [Your Firm] has been retained by [Issuer Legal Name] (or [Payor Name]) and received $[X] (or [Y] shares) for investor relations/marketing services during [date range]. Full disclosure: https://YOURDOMAIN.com/disclosures/[issuer].
B) If compensation is equity (shares/options/warrants)
Paid Promotion / 17(b) Disclosure: [Your Firm] received [Y] shares (and/or options/warrants) from [Issuer/Payor] as compensation for IR/marketing services for [term]. We may sell some or all of these securities at any time. Full disclosure: https://YOURDOMAIN.com/disclosures/[issuer].
C) If a third party pays (not the issuer)
Paid Promotion / 17(b) Disclosure: [Your Firm] is compensated by [Third-Party Payor Name] (not the issuer) in the amount of $[X] to provide marketing/communications services relating to [Ticker]/[Issuer]. Full disclosure: https://YOURDOMAIN.com/disclosures/[issuer].
D) Add-on language (helpful but not a substitute)
- Not investment advice. For informational/advertising purposes only.
- No guarantee of performance. Investing involves risk, including loss of principal.
- See issuer filings and risk factors on EDGAR: https://www.sec.gov/edgar/search/
Where to place disclosures on message boards
- Put the disclosure at the beginning of the post or immediately next to the ticker callout.
- Repeat the disclosure in each new promotional post (threads get separated, reposted, and screenshotted).
- Make the disclosure easy to read on mobile (short sentences; no tiny-font images).
Key risks for issuers and promoters
- 17(b) enforcement (failure to disclose compensation and the amount)
- Anti-fraud exposure (misstatements/omissions, misleading hype, or selective disclosure)
- Market manipulation allegations (coordinated activity, false appearance of demand)
- Reputational damage and platform/account bans
- Civil litigation risk (including class actions after price spikes and drops)
FAQ (common client questions)
Is a hyperlink to a disclaimer page enough?
A link helps, but relying on the link alone is risky. Best practice is to include the key facts (who paid + amount + form of compensation) in the post itself, then link to a fuller disclosure page.
Do we have to disclose the amount if we were paid?
Section 17(b) focuses on disclosing that you were compensated and the amount of that consideration. If you are paid (or will be paid) to promote a security, plan for amount-specific disclosure.
What if we are only reposting the issuer’s press release?
If the repost is part of a compensated promotional engagement, it can still be a “communication” describing a security. You should treat it like any other promotional post and include the 17(b) disclosure.
Does “not financial advice” protect us?
It does not substitute for required compensation disclosure and does not prevent liability for misleading statements or omissions.
How we can help
Hamilton & Associates regularly advises issuers, investor relations firms, and promoters on compliant communications, 17(b) disclosures, social media policies, microcap risk controls, and broker-dealer registration risk issues that arise when marketing firms receive transaction-based compensation.
If you are an investor provider posting on InvestorsHub, Stocktwits, Seeking Alpha, or Investor Village, and especially if you are paid in cash or equity, we can assist you in all aspects of SEC disclosure and compliance related to your activities.
Disclaimer: This blog post is for general informational purposes and does not constitute legal advice. Application of securities laws is fact-specific.
This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group. It should not be construed as and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.
If you have any questions about this article, Hamilton & Associates Law Group, P.A. is ready to help.
Since 1998, our Founder, Brenda Hamilton, has been a leading voice in corporate and securities law, representing both domestic and international clients across diverse industries and jurisdictions.
To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected].
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Brenda Hamilton, Securities Attorney
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