50 Cent May Be Investigated Over Stock Tweets

50 Cent may be under investigation by the Securities and Exchange Commission (SEC) for Tweeting advice to purchase stock in a company he is a major shareholder in.

In a series of Tweets last weekend, the rapper encouraged fans to buy stock in TV Goods (stock symbol HNHI).

The stock price almost quadrupled after the Tweets as fans flocked to buy stock, earning congratulatory Tweets from 50 Cent.


That might have him in hot water with the SEC for manipulating share price, often known as a "Pump and Dump", where the shares are quickly sold to cash in on the profits. 50 Cent has not sold his shares so far, but that might not be enough to keep him out of trouble.

On January 6th, TV Goods announced a new deal with 50 Cent to release a new line of audio products associated with his brand. An article announcing the deal describes 50 Cent as "a significant minority shareholder in TV Goods and will be offered a seat on the Board of the Company at a later date."

50 Cent started Tweeting to encourage his fans to buy stock in TV Goods just days later. Stock jumped from .10 per share before the Tweets began to .39 per share on Monday morning when the stock markets reopened. 50 Cent's 30 million shares in TV Goods jumped in value almost $9 million that weekend.

50 Cent then returned to Twitter and Tweeted, "Ok ok ok my friends just told me stop tweeting about HNHI so we can get all the money. Hahaha check it out its the real deal." And, "(My) own HNHI stock thoughts on it are my opinion. Talk to (a) financial advisor about it. HNHI is the right investment for me it may or may not be right for (you)! Do ur (sic) homework." He also deleted his original Tweets recommending buying stock in TV Goods.

The SEC has refused to make a public statement at this time about an investigation, "A spokesperson for the SEC has declined to comment on the speculation, telling Fox411, "We can neither confirm nor deny (the reports)."

50 Cent may have also run afoul of another regulatory group.

Tom Chernaik, CEO of CMP.LY, says 50 Cent may have broken Federal Trade Commission laws about celebrity endorsements. "The use of social media promotion to raise the share price of a fledgling company is certainly a concern," Chermaik said, "not necessarily from SEC regulations but, rather, under the FTC Guidelines for Testimonials and Endorsements. The guidelines, updated in late 2009 require endorsers to disclose when they have material connections to the brands and products that they promote. In this example, there certainly seems to be a connection that might come as a surprise to the average reader."

And if you were one of the many people who took 50 Cent's advice and purchased the stock?

The NY Post adds a touch of reality to your dreams:

"Jackson's hype won't fix the cash-flow problems at H&H (TV Goods). The company lost $1.3 million last quarter on revenues of just $292,933. As of Sept. 30, the company has accumulated a deficit of $3.3 million and in March its auditor raised questions about its ability "to continue as a going concern," the company has said in financial documents."