The Securities and Exchange Commission (SEC for short) is charging a number of people and businesses with participating in a secret scheme to write paid articles to make certain publicly traded companies look good. Being paid to promote a company is legal (believe it or not), but failing to disclose it is not.
Regardless, here at The Motley Fool, we believe that receiving compensation to promote a company is unethical. Our mission is to help the world invest, better – and that means going above and beyond what is merely legal. As a company, we have never accepted payment to make a stock look good. And our Code of Foolish Conduct has explicitly banned employees and freelance/contract writers from accepting compensation for their work outside of what our company pays them, since at least 1997 (when we got sophisticated enough to have a Code of Foolish Conduct).
Here's why this is important
The internet is full of bad stock information. That's compounded when people work together to intentionally mislead investors. While we have always sought to educate and enrich our readers and the wider world, as a private business we are limited in what we can do to prevent or catch misconduct.
So we are glad to see the SEC act decisively to safeguard investors from bad actors. Yesterday's action should be cheered by all investors and all companies who have investors' best interests at heart.
One of the writers named in the complaint freelanced for The Motley Fool in addition to a number of other sites. (We ended our relationship with him over unrelated matters in 2014.) Like all of our writers, he was required to abide by our Code of Foolish Conduct – and we do not have the ability to know whether contributors are secretly taking payments to influence their coverage. The kind of people who will do that are also the kind of people who will lie about whether they're following the rules. We can't demand access to their bank accounts.
Fortunately, the SEC can (once they go through the appropriate channels.) So we look forward to the successful conclusion of the SEC's investigation and hope that they will serve investors' interests.
Our commitment to you
You give us your time and your trust. (Some of you even give us money as premium subscribers!) We work every day to be worthy of that.
That's why the facts below are so important.
- The Motley Fool (along with the other websites mentioned by the SEC) is not accused of any wrongdoing in the SEC complaint. And to our knowledge, we aren't a target of any investigation.
- This freelancer was not involved in our premium services, so there was never any influence on our stock picks.
- Out of an abundance of caution, we have removed all articles on Fool.com written by the accused freelancer. Accusations this serious cast suspicion on his entire body of work, so we are decisively acting to safeguard our readers from any other potential issues. The same logic applies to all articles written about the companies named in the SEC's complaint, and we are working to remove any content about them as well.
We will continue using our core values as the north star to guide our business decisions. We believe that our business prospers when our readers and members prosper. We strive to treat all of our stakeholders as we would members of our family, a "golden rule" mentality that we use to guide all of our business decisions.
We will continue our rigorous work to provide investors with the best stock coverage anywhere. That means accurate information, thoughtful analysis, and insightful commentary – all written in plain language anyone can understand.
We will continue to advocate for investors. We have pushed for a number of investor-friendly transparency initiatives throughout our 23-year history. In fact, former SEC Chairman Arthur Levitt once called The Motley Fool "as close to being an effective investor advocate as any organization in America."
For us, these values are non-negotiable. That's how we can help the world invest, better.
Press inquiries should be directed to Alison Southwick (firstname.lastname@example.org).