The suit, filed by 87 individuals, accused Entrepreneur of gross negligence for including Agape World on its Hot 100 list in its May 2008 issue. According to the complaint, the plaintiffs invested money in Agape after seeing the company on Entrepreneur‘s list. Agape’s CEO, Nicholas Cosmo, was later arrested and the company was revealed to be a Ponzi scheme. The plaintiffs are seeking $178 million from Entrepreneur‘s publisher, Entrepreneur Media.
In its motion seeking dismissal of the suit, Entrepreneur pointed out that its Hot 100 list is not supposed to be used as a basis for investment strategy.
“The ‘Hot 100 at a Glance’ was offered as informative material to a general audience of readers and neither draws any conclusions nor makes any recommendations to its readers, as to the financial suitability of an investment in any of the listed companies,” the motion explained.
Although that argument is a strong one, Folio magazine’s Dylan Stableford, who has been covering this case from the beginning, pointed to another argument for dismissal used by Entrepreneur that is not quite as convincing — and actually a sort of sad commentary on the state of magazine journalism. The magazine claims that under New York law it doesn’t owe its readers “a duty of care” in publishing its Hot 100 list.
“It’s probably all legaleze, but it’s awfully weird for a publisher to argue it isnâ€™t obligated to care about its readers,” Stableford said.
We tend to agree. Although we hope Entrepreneur won’t have to pay $178 million for these investors’ unfortunate decisions, we do believe that journalists and publishers have a duty to their readers to provide accurate information. However, in the case of its Hot 100 list, Entrepreneur only provided very limited information and didn’t offer any judgments or predictions about the health and security of Agape. (If you are not familiar to the list, a sample is provided in the court documents, which can be accessed through Folio‘s site.)
It seems to us that this case might be a little frivolous, but if these investors have lost $178 million, they are probably looking for any way possible to get it back.
What do you think? Do you think publications have a duty of care to their readers? Do you think Entrepreneur is responsible to the Agape investors in this case? Leave us your thoughts in the comments below.