Feds Say Ashton Kutcher Could Be in Trouble

Ashton Kutcher's editorship of Details was, as we noted yesterday, a brazenly self interested and highly misleading act of journalism. But it may have been a federal crime, too, judging from what the New York Times is reporting.

"It's certainly a possibility that a case like this could be investigated," assistant Federal Trade Commission director Richard Cleland tells the Times of Kutcher's Details special online issue, in which eight of 12 recommended products in one article were Kutcher investments. "If you're out there promoting individual products that you have a specific investment in, it needs to be disclosed... If you have a significant economic investment that is not otherwise apparent, that may potentially affect the credibility of your endorsement, and I see that as a potential problem." The FTC has made a priority out of online conflicts of interest.

It's also possible Kutcher violated SEC rules. You're not supposed to promote a company you partly own—say, in a magazine—if you know it's soon to go public. And if a company's shares trade on private secondary markets you must abide federal rules on deceptive marketing, which a former SEC lawyer told the Times were "very broad... These rules apply any time there is a securities transaction."

Details, for its part, now says there was some disclosure: A line in the introduction saying Kutcher "puts his money where his mouth is, backing many of the companies he champions here."

That's all well and good, but the disclaimer is obscure and puts readers at a total loss for where—and how often—Kutcher was promoting companies he partly owns. In addition to recommending his own investments as 8 of 12 products forming "Generation Next," Kutcher named his investments to three of four spots in a collection of features at the heart of the special issue called "Titans of Tech." Elsewhere, he promoted a site called Fashism, which he invested in, and Katalyst Media, which Kutcher co-founded. There was no specific disclosure on any of that. (For the record, when we ran our concerns past a Details spokeswoman in a back and forth prior to running our last piece, she did not mention the short disclaimer.)

Though it's found no big fish to fry thus far, the FTC seems eager to show it's serious about enforcing online disclosure, whether it's on Twitter, Facebook, or Tumblr. Kutcher's issue was on all three. And he's certainly high profile. His ability to draw attention is what he sells, after all—or, in this case, shamelessly exploits. The actor will be an example no matter what happens, either of what sorts of behavior the FTC frowns on, or of just how much covert self promotion writers can get away with.

Update: The FTC contacted us to clarify Cleland's remarks to the Times and make clear that it is not currently planning to take action against Kutcher. Said FTC consumer protection director David Vladeck: "The FTC is not and has no plans to investigate Ashton Kutcher."

[Photo of Kutcher via Getty]