# 15 U.S.C. § 77q — Fraudulent interstate transactions (Securities Act of 1933 § 17) - **Source URL:** https://www.law.cornell.edu/uscode/text/15/77q - **Host:** Cornell Legal Information Institute (LII), U.S. Code text - **Pinpoint cite:** 15 U.S.C. § 77q(b) (Securities Act of 1933 § 17(b)) — anti-touting / paid-promotion disclosure - **Retrieved date:** UNKNOWN - **Statutory history (as shown by LII):** May 27, 1933, ch. 38, title I, § 17, 48 Stat. 84; Aug. 10, 1954, ch. 667, title I, § 10, 68 Stat. 686; Pub. L. 106–554, § 1(a)(5) [title III, § 302(b), (c)], Dec. 21, 2000, 114 Stat. 2763, 2763A–452; Pub. L. 111–203, title VII, § 762(c)(2), July 21, 2010, 124 Stat. 1759. --- ## Full text (verbatim, as archived from Cornell LII) **(a) Use of interstate commerce for purpose of fraud or deceit** It shall be unlawful for any person in the offer or sale of any securities (including security-based swaps) or any security-based swap agreement (as defined in section 78c(a)(78) of this title) by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly— > (1) to employ any device, scheme, or artifice to defraud, or > > (2) to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or > > (3) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. **(b) Use of interstate commerce for purpose of offering for sale** It shall be unlawful for any person, by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, to publish, give publicity to, or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof. **(c) Exemptions of section 77c not applicable to this section** The exemptions provided in section 77c of this title shall not apply to the provisions of this section. **(d) Authority with respect to security-based swap agreements** The authority of the Commission under this section with respect to security-based swap agreements (as defined in section 78c(a)(78) of this title) shall be subject to the restrictions and limitations of section 77b–1(b) of this title. --- ## Key sections flagged These bear directly on **paying a creator** to promote/describe a security or securities-adjacent offering. **§ 77q(b) — the anti-touting / paid-promotion disclosure rule (verbatim):** > "It shall be unlawful for any person, by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, to publish, give publicity to, or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof." Load-bearing elements for creator comp: - **"describes such security ... though not purporting to offer a security for sale"** — the rule reaches ordinary promotional/editorial content about a security, not just a sales pitch. A creator "just talking about" a deal is covered. - **"for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer"** — any compensation, direct or indirect, from those sources triggers the duty. "Indirectly" reaches pass-through / agency / affiliate arrangements, so routing creator pay through an intermediary does not avoid it. - **"without fully disclosing the receipt, whether past or prospective, of such consideration AND the amount thereof"** — disclosure must be **full**, must cover **both past and prospective** pay, and must state the **amount**. A generic "#ad" / "sponsored" tag that omits the amount does not satisfy the literal text. - The medium list — **"notice, circular, advertisement, newspaper, article, letter, investment service, or communication"** — is broad enough to cover posts, videos, newsletters, and other creator channels. **§ 77q(c) — no § 77c exemption escape (verbatim):** > "The exemptions provided in section 77c of this title shall not apply to the provisions of this section." Load-bearing point: the § 77q(b) touting-disclosure duty is **not lifted by the § 77c registration exemptions** — so even where the underlying security/offering is exempt from registration, the paid-creator disclosure obligation still applies. **§ 77q(a) — the general antifraud backstop (context):** paid promotion that is misleading (or omits material facts, § 77q(a)(2)) is independently unlawful regardless of the (b) disclosure. Relevant because a compliant (b) disclosure does not cure a deceptive endorsement.