How to Find and Read a Paid Stock Promotion Disclosure

What Section 17(b) requires

Section 17(b) of the Securities Act of 1933 is a single sentence. It makes it unlawful to publish, publicize or circulate a description of a security, even one that does not offer the security for sale, in return for consideration received or to be received, directly or indirectly, from an issuer, underwriter or dealer, without fully disclosing that receipt, past or prospective, and the amount. The list of forms it names runs from notice, circular and advertisement through newspaper, article, letter and investment service, and ends with the word communication.

Three details carry the weight. The payer named in the statute is an issuer, an underwriter or a dealer, but the payment can arrive indirectly, through a promotion firm or an agency in between. The payment can be past or prospective, so a fee promised for later counts. And the disclosure has two parts, the fact of payment and the amount. A line saying the writer was compensated, with no figure, gives you the first part only.

The SEC brings cases under it. On 10 April 2017 it announced enforcement actions against 27 individuals and entities behind stock promotion schemes in which public companies hired promoters or communications firms, which in turn hired writers to publish bullish articles that did not disclose the payments. More than 250 of those articles falsely stated that the writer had not been compensated, the SEC alleged, and one writer used his own name and at least nine pseudonyms, one of them an invented fund manager.

Paid promotion also sits outside the shape this site works in. In Lowe v. SEC the Supreme Court read the publisher exclusion as covering genuine publications, noting there was no suggestion the newsletters before it were designed to tout any security in which their publishers had an interest. Our guide to publishers and registered advisers covers that line.

Where the disclosure sits

Start where the pitch ends and work outward. Look in four places, nearest first: the last lines of the email, post or text itself; an asterisk or a line of small print under the headline; a footer line repeated on every page; and a separate page linked from the footer under a name such as Disclaimer or Disclosures. Search each one for compensat, paid, advertisement and 17(b).

A promoter site we read on 4 August 2026 shows the usual layout. Every page carried an all-caps footer line saying all stock alerts are compensated by either a third party or the issuer. A separate disclaimer page described the site as a paid advertisement and listed its conflicts, including that it publishes no negative information because nobody pays it to. The ticker post we read carried the general boilerplate but no issuer name and no amount. The text-alert sign-up page on a separate subdomain carried no compensation language anywhere in the 213 KB we fetched.

The footer also told readers to look for an individual disclaimer whenever a communication mentions a specific security. The post about a specific security had none that we could find. A pointer to a disclosure is not the disclosure, so follow every pointer to its end and note where it stops.

Read it for four answers

Who paid? The statute names three kinds of payer: the issuer, an underwriter or a dealer, directly or through someone else. A disclosure that says a third party paid, without naming the third party, has answered half the question. If the payer is a shareholder, that matters too, because a shareholder paying for publicity owns stock it may want to sell.

How much? The statute asks for the amount. A dollar figure, a share count, or both. When the payment is in shares, the count tells you how much stock the promoter itself could sell into the campaign.

For which stock, and over what period? A disclosure written for one ticker and one campaign tells you more than sitewide boilerplate that covers every ticker the site has ever touched. The period matters because a campaign has a start and an end. The joint SEC, NASAA and FINRA alert describes the usual end of a pump-and-dump: once the promoters sell, the price drops and the remaining investors lose most of their money.

The disclaimer page from August added a fifth answer on its own: it said the parties paying for the coverage may hold a significant amount of the public float and may sell their shares while the information is being published. When a disclosure says that, take it at its word.

The blank table

The same disclaimer page recited the obligation correctly. It said the securities laws, including Section 17(b), require the publisher to disclose the nature and amount of its compensation. Under that sentence sat a table with four columns, Name of Issuer, Amount of Cash Compensation, Period of Publication of Information and Where Information is Published, and every cell read Coming Soon.

A table like that names no payer and no amount, so it carries none of what the statute asks for, while looking at a glance like a disclosure. Whether it meets the law is a question for a regulator. As information it is empty, and the pitch above it is paid content with the payer unknown.

The tell generalizes. A disclosure is a set of filled-in values. Placeholder text, a link to a page that does not exist, and an amount described only as available on request are all the same blank, and each one is worth writing down with the date you saw it.

Check the company's side of the record

The promotion is one half of the picture. The company's own filings show who could be selling while it runs, and every one of them is public on EDGAR. Registrations and priced offerings, the S-1, S-3 and 424B filings, are in the offering checker. Private share sales disclosed under Item 3.02 of Form 8-K, and the warrants outstanding, are on the dilution page. Officers, directors and holders of more than 10% must report a change in their holdings on Form 4 before the end of the second business day after the trade, and those filings land on our insider tracker. The share count that actually trades is on the float page.

None of this proves a promotion is under way, and plenty of honest small companies show several of these at once. The same joint alert notes that microcap stocks may be particularly vulnerable to investment schemes, pump-and-dumps among them, because there is often little public information about the companies behind them. Each filing answers a narrower question than the pitch does: who holds shares that could be sold into the demand the campaign creates.