SEC Charges Investor Relations Firm and Owner for Failing to Disclose Compensation for Paid Tweets
July 22, 2020
File No. 3-19890
July 22, 2020 - The Securities and Exchange Commission today announced settled charges against Irth Communications, LLC, a California-based investor relations firm, and its owner, Andrew Haag, for failing to disclose the source or amount of compensation Irth had been paid to publish tweets promoting the securities of Irth's clients.
The SEC's order finds that, from December 2017 until February 2018, Irth, at Haag's direction, tweeted or retweeted 23 positive news articles describing the business, products, and securities of nine clients. The order finds that Irth failed to disclose that it had received approximately $35,000 in compensation from these nine clients for these tweets.
The SEC's order finds that Irth and Haag violated the anti-touting provision of Section 17(b) of the Securities Act of 1933. The SEC's order requires Irth to cease and desist from any violations and future violations of this provision and to pay disgorgement of $35,000, prejudgment interest of $4,233.71, and a civil penalty of $35,000. In addition, the order requires Haag to cease and desist from any violations and future violations of this provision and orders him to pay a civil penalty of $7,500. Both Irth and Haag have consented to entry of the order without admitting or denying the SEC's findings.
The SEC's investigation was conducted by Penny Morgan of the Atlanta Regional Office and was supervised by Natalie Brunson and Justin Jeffries.