Creator Liability: Lessons From Cardone and Kardashian

Q: Can a creator be liable just for posting about a deal?

Potentially. In Pino, the Ninth Circuit held that promoting a security in a mass communication can count as soliciting a purchase, which let the investors' claims go forward. It did not decide liability.

Creators who promote investments can be held to account for what they say. A federal appeals court let investors' claims over social media posts go forward against a real estate fund promoter, and the SEC penalized a celebrity for an undisclosed paid post. If you are the sponsor, we built DoorRaise with escrow and a standard fee card for that reason, and this post sticks to what the primary sources say.

Key takeaways

In Pino v. Cardone Capital (Ninth Circuit, Dec. 21, 2022), the court held that a person can solicit a purchase by promoting a security in a mass communication. It revived claims; it did not decide liability.
A class notice in that case says no liability has been determined, the defendants deny the allegations, and trial is scheduled for March 9, 2027.
In an order dated Oct. 3, 2022, the SEC found Kim Kardashian violated Section 17(b) by promoting a crypto asset security without disclosing payment, and she settled without admitting or denying.
A July 2, 2026 SEC order found a sales agent for a real estate notes offering acted as an unregistered broker and received commissions.
Our pick for sponsors: put claims in the offering documents, disclose pay, use independent escrow, and have counsel review what you publish.

What is the liability risk for a creator?

It comes from several places at once: the antifraud rules, the paid-promotion rule, the seller liability sections of the Securities Act, and broker registration. The cases below show where each one has been applied, and your own exposure depends on your role and facts.

Rule 10b-5 prohibits untrue statements of material fact and misleading omissions in connection with buying or selling a security. Section 17(b) prohibits publishing a communication about a security for consideration from an issuer, underwriter or dealer without fully disclosing the consideration and its amount.

Section 12(a) lets a buyer recover the consideration paid with interest, less income received, from a person who offers or sells a security in violation of Section 5, or by a communication containing a material misstatement or omission. It is part of our real estate syndication coverage, and it is not a prediction that you will be sued.

What did the Ninth Circuit decide in Pino v. Cardone Capital?

It decided that investors plausibly alleged that Grant Cardone and Cardone Capital were statutory sellers, which let two claims go forward. The opinion was filed December 21, 2022.

Luis Pino sued on behalf of himself and a putative class, alleging that Instagram posts and a YouTube video from February to December 2019 solicited investments in Cardone Equity Funds V and VI and contained misstatements or omissions about returns, distributions and appreciation. He asserted a Section 12(a)(2) claim and a Section 15 control person claim. The district court had dismissed.

The court held that "a person can solicit a purchase, within the meaning of the Securities Act, by promoting the sale of a security in a mass communication." It rejected the argument that solicitation must be "active and direct," and noted the complaint alleged a financial interest, including that Cardone Capital received 35% of the Funds' profits.

Three limits matter:

The court decided only that the allegations were enough to proceed.
The opinion does not discuss Rule 506(c), and it describes the funds as offered under Regulation A.
The statements described are allegations, not findings.

Where does the Cardone case stand now?

Per a class notice in the case, it is in the Central District of California (No. 2:20-cv-08499-JFW) and has not been decided. The notice describes the class as people who purchased or otherwise acquired an interest in Cardone Equity Fund V or VI through their public offerings.

The notice gives an opt-out deadline of July 14, 2026 and a trial date of March 9, 2027. It says "the Court has not decided whether Plaintiff or Defendants are correct."

It also records the defendants' position: they deny the allegations and say they disclosed the benefits and risks. We take no view on who is right, and dates can move, so check the docket before you cite the case. The Ninth Circuit also issued a second opinion in the case on June 10, 2025, reported by FindLaw, reversing another dismissal of the Section 12(a)(2) and Section 15 claims. It, too, held only that the complaint stated plausible claims.

What did the SEC find in the Kim Kardashian order?

The SEC found she violated Section 17(b) by promoting a crypto asset security without disclosing the compensation and its amount. The order is dated October 3, 2022 (Release No. 33-11116), and the SEC's press release carries the same date.

Per the order, she posted on Instagram on June 13, 2021 about EthereumMax tokens, and EthereumMax paid her about $250,000 through an intermediary. She consented to the order without admitting or denying the findings, except as to jurisdiction. She agreed to pay disgorgement of $250,000, prejudgment interest of $10,415.35 and a civil penalty of $1,000,000, a total of $1,260,415.35.

She also agreed not to accept compensation for promoting a crypto asset security for three years and to continue cooperating with the SEC's investigation. The press release quotes the SEC chair saying the law "requires them to disclose to the public when and how much they are paid to promote investing in securities."

The asset was a crypto token, not an apartment deal. The lesson that transfers is the statute: paid promotion needs disclosure of the payment and the amount.

What did the July 2026 unregistered broker order find?

It found that a sales agent for a real estate notes seller acted as an unregistered broker and received commissions. The agent consented without admitting or denying the findings, except as to jurisdiction, subject matter and the injunction. The order is Release No. 105843, dated July 2, 2026.

The agent promoted the notes as safe investments on social media and a Spanish-language radio show, according to the order. It states the scheme "raised at least $56 million from approximately 660 investors," that the agent and his sales team personally raised at least $10 million from about 190 of them, and that the seller and its principals operated a Ponzi scheme.

The agent was barred from associating with listed SEC-regulated entities, with the right to apply for reentry after five years, and consented to an injunction.

The point is not that every paid promoter is part of a fraud. Commissions tied to sales draw broker registration questions. See paying capital raisers.

What practices do the three matters point to?

Each matter points to a plain habit. This table maps risk to a safer practice, and it is our reading, not a legal standard.

Risk shown	Safer practice
Return claims in public posts (Pino allegations)	Keep projections in the offering documents with assumptions and risks
Undisclosed pay (Kardashian order)	Disclose who pays you and how much, every time
Commissions per investor (2026 order)	Do not pay or accept transaction-based pay without counsel
Investor money passing through you	Use an independent escrow agent
Skipping verification in a public raise	Verify every investor under 506(c)
Hype and urgency	Plain facts and a link to the full terms

For wording, see what creators can say about a real estate deal. For the verification side, see Rule 506(c) for content creators.

A worked example of how rescission math works (illustrative)

Section 12(a) lets a buyer recover the consideration paid, with interest, less any income received. These numbers are illustrative and do not reflect any case. Suppose a raise has 20 investors who each paid $50,000 and each received $2,000 in distributions.

Before interest, each recovery would be $50,000 - $2,000 = $48,000, and 20 x $48,000 = $960,000. Interest would add to that. This is why a sponsor cannot treat a misleading post as only a marketing problem: the exposure scales with the amount raised, not with the post.

Whether a claim succeeds depends on proof of a violation and any defense. Under Section 12(a)(2), a seller who proves they did not know of the untruth or omission, and could not have known with reasonable care, is not liable. Ask your attorney how that applies.

How do you check your own exposure?

Use a short decision checklist before you publish or accept pay.

What is your role? Sponsor, paid promoter, unpaid fan or co-investor each carry different questions.
Are you paid per investor or per dollar raised? If yes, ask counsel about broker registration before you start.
Does every public number match the offering documents?
Is your pay disclosed in the content itself, not only in a linked page?
Where does investor money go? It should go to an independent escrow agent, not your account.
Have you saved what you published, with dates?

Our take

Our take: the practical lesson is not "never post." It is that the post is evidence, so write it as if a lawyer on the other side will read it next year.

We think mixing roles adds risk. A creator who is sponsor, promoter and fund collector in one carries the most, and independent escrow plus a documented process lowers it.

We also think sponsors should be wary of anyone who offers to promote a raise for a percentage of the capital, which is the structure the 2026 order addressed. The investor red flags list from Investor.gov says unregistered persons who sell securities are behind many frauds that target retail investors.

Trade-offs and who this is not for

Reading enforcement and litigation tells you where regulators and plaintiffs have pushed. It does not tell you your odds.

Not for anyone who wants a risk score. The cases show how liability can arise, and your exposure depends on your statements and role.
Not a substitute for counsel. Allegations in a class notice are not findings, and consent orders are not admissions.
Not a reason to avoid public marketing. Rule 506(c) is built for it, with accredited investors and verification.

Common mistakes:

Treating a legend or disclaimer as a shield for specific promises.
Taking investor money into your own account "temporarily."

How DoorRaise fits in

DoorRaise helps sponsors raise equity for apartment buildings with 5+ units from people who already trust them, under Rule 506(b) or 506(c). It is software, legal document preparation, escrow coordination and verification services, not a law firm, broker-dealer, investment adviser, funding portal, bank or escrow agent. We do not hold investor money: funds go to an independent escrow agent named on each deal.

We charge three flat fees and take 0% of the raise or profits.

The $500 setup fee, due when you submit the deal, covers forming the deal's LLC, investor documents from attorney-approved templates, an escrow account in the deal's name, the deal page, live call sign-up, and accreditation checks on every investor.

The $5,000 closing fee, paid from the funds raised and only if the deal closes, covers attorney review of the offering documents, sponsor, purchase contract, title and loan checks, and the Form D filing.

The $3,500 yearly fee covers bookkeeping, the tax return and K-1s while you own the property.

State filing fees are included in the $5,000 closing fee. If the raise does not close, every investor gets their money back from escrow. See flat-fee pricing.

Ready to raise? Create your free sponsor page or see pricing.

FAQ

Can a creator be liable just for posting about a deal?

Potentially. In Pino, the Ninth Circuit held that promoting a security in a mass communication can count as soliciting a purchase, which let the investors' claims go forward. It did not decide liability.

Do I have to disclose that I'm paid?

If you are paid by an issuer, underwriter or dealer to publish a communication describing a security, Section 17(b) requires disclosing the payment and its amount. Ask counsel how it applies to your arrangement.

Is a private offering exempt from fraud rules?

No. The antifraud rules, including Rule 10b-5, apply to securities offerings whether or not they are registered.

Has the Cardone case been decided?

Not as far as the class notice we reviewed shows. It says trial is scheduled to begin March 9, 2027 and that no liability has been determined, so check the docket for updates.

Did Kim Kardashian admit wrongdoing?

No. The order says she consented without admitting or denying the findings, except for jurisdiction, and the sanctions totaled $1,260,415.35.

Can I pay a friend a percentage for introducing investors?

Transaction-based pay can raise broker registration issues, as the July 2026 SEC order shows. Talk to a securities attorney before you agree to any such arrangement.

Sources

This article is general information, not legal, tax or investment advice. It describes public enforcement orders and a class notice, and allegations are not findings. Talk to a securities attorney before you market an offering. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.