Reuters reported that the SEC put the kibosh on using Facebook and Twitter to plug BuyaBeerCompany.com.
It was launched by Brian William Flatow and Michael Migliozzi in November 2009 in an effort to attract investors in Pabst Brewing, granting them certificates of ownership and “beer of a value equal to the amount invested.”
The SEC said Flatow and Migliozzi failed to register with securities regulators and file necessary disclosures, according to Reuters.
Flatow and Migliozzi claimed to have raised more than $200 million from more than five million pledges in February 2010, Reuters reported. And their website even featured a countdown timer, but the site was taken down in April 2010, and no money was raised.
The two men agreed to a cease-and-desist order covering similar activities. SEC Associate Enforcement Director Scott Friestad told Reuters:
Investors are entitled to know certain basic information about a company before being asked to invest. Just because would-be investors are being solicited online doesn’t make them less deserving of the protections under our securities laws.
The timing of this seems a wee bit ironic given that Facebook has recently relaxed its guidelines to allow some promotions of alcohol on the site — of course, these changes don’t provide any loopholes that would benefit BuyaBeerCompany.com, nor efforts to solicit investors in Pabst.