America’s Favorite New Couple and The Impact of Social Media on the Financial Landscape

If you haven’t heard of them both, you’ve probably heard of at least one. And if you haven’t heard of either of them, well, you will now.

Future National Football League (“NFL”) Hall of Fame tight end Travis Kelce, and pop-culture superstar singer Taylor Swift, are the apple of American media’s eye. The two started dating amidst a flurry of rumors, and the media noise reached its climax when it was announced that Taylor Swift would attend the September 24th Kansas City Chiefs game against the Chicago Bears.

That night’s NFL broadcasters and camera crew were often caught discussing or filming Swift rather than the players down on the field. Fans, pundits, and lay people took to social media to post about the celebrity power couple. Their relationship’s presence on social media was so profound that it “caused” Kelce’s NFL jersey sales to rise over 400%. The NFL announced Swift’s attendance for the following week’s prime-time Chiefs game against the Jets. The outcome? A sold-out stadium. Furthermore, the NFL went so far as to change its photo on X to a trio of images of Taylor Swift at the Chiefs-Jets game and state, “Chiefs are 2-0 as swifties” on Instagram.

This Swift-Kelce craze highlights the potential for the pop culture and social media engine to abruptly impact the financial landscape at any point in time. Word-of-mouth on social media permitted the NFL to accrue real profits from mere celebrity attendance at a game. With increasing online presence and ever-improving social media acuity, organizations are well-equipped to influence their business economy swiftly.

Cole Haaf, BridgehouseLaw LLP, Charlotte

Fatal Directions and Unheard Warnings

In September 2022, Philip Paxson was driving home from his daughter’s birthday party in Hickory, North Carolina. Like so many of us do daily, he relied on Google Maps for directions. Part of the directions Google Maps suggested was for Mr. Paxson to cross a small bridge over a creek. The issue was that this bridge no longer existed as it had collapsed nine years prior. Navigating unfamiliar roads on a rainy night, Philip Paxson drove off the road where the bridge once was and tragically drowned. Philip’s family is now suing Google, claiming the company failed to update its maps.

The complaint alleges that twice in 2020, a Hickory resident used the “suggest an edit” feature on Google Maps to alert the company that the bridge was gone and not to direct people to use it. It is alleged that Google took no action in response to these alerts and noted only that they were “being reviewed.” Further, the lawsuit claims that Google continued to suggest users cross the bridge months after Mr. Paxson’s fatal crash. Along with naming Google as a defendant, the complaint also targets several private property management companies responsible for the land around the bridge and who the family alleges should have closed off the property.

The broader question beyond this tragic death and the potential legal ramifications if Google is found negligent is what can corporations learn from this. One thought is to take a second look at how corporations evaluate criticism. Does your business have a consumer feedback system, and if it does, how often is this feedback reviewed and considered? Internally, are employees allowed to make suggestions or raise concerns regarding the company? Are there any ways to fill gaps in knowledge that may come from sources outside the business? There are limits to how much information a company can realistically work through and how much of the feedback could be useful. However, one wonders what could have happened had Google reacted differently to its received feedback.

Luca Tappa, Law Clerk, BridgehouseLaw LLP, Charlotte

Image Trackimo

The SEC’s Consolidated Audit Trail – a Threat to Liberty and Privacy

In a world where data privacy is paramount, an alarming development is poised to reshape the landscape for American investors. The Consolidated Audit Trail (CAT), a comprehensive surveillance system created by the Securities and Exchange Commission (SEC) in response to the 2010 "flash crash," is set to collect and store vast amounts of personal and financial data of every U.S. investor. While ostensibly aimed at monitoring market activity, this initiative raises significant concerns about the erosion of individual privacy and potential security risks.

The CAT's Unprecedented Scope

The CAT, conceived in 2012 and launched in 2020, was designed to meticulously record every order, cancellation, modification, and trade execution for exchange-listed equities and options across all U.S. markets. While its initial purpose was to enhance market oversight, the CAT has evolved into a data behemoth that gathers American investors' personally identifiable information, including name, addresses, and birth year.

Data Security Concerns

The CAT's colossal size poses a significant data security risk. A breach of this magnitude could expose investors' trading activity and personal information, opening the door to potential exploitation by malicious actors. In a world where cybersecurity threats are a daily concern, the lack of robust safeguards for such a vast database is deeply troubling.

A Threat to Financial Privacy and Civil Liberties

Beyond security concerns, the CAT's creation infringes upon financial privacy principles and civil liberties. Trading is a form of value expression, and the CAT's sweeping surveillance interferes with Americans' Fourth Amendment rights to be free from unreasonable government searches and seizures.

The Need for Alternatives

While the SEC has legitimate reasons to monitor market activities, some alternatives would protect individual privacy without compromising its law enforcement ability. Suggestions include prohibiting personal information from the CAT database and allowing the SEC to request data from brokers on a case-by-case basis when necessary. Other proposals advocate for a more limited database focused on institutional investor trading or improving existing systems.

Stay informed and vigilant as we continue to monitor this important issue. Your privacy and civil liberties matter. Investors who want to protect their data from CAT must take measures. We will gladly support you in establishing your personal trading LLC.

Marius Krause, Law Clerk, BridgehouseLaw Charlotte

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October 2023

Volume 15 Issue 10