Wednesday, March 30, 2016

Legal Geek No. 68: April Fools' Day and Fraud

Welcome back to Legal Geek. This week, we take a brief look at the history of April Fools' Day and the risks some take when humor crosses the line into fraud.

https://archive.org/details/LegalGeekEp68

This week brings the beginning of April, and the Internet's favorite holiday April Fools' Day. In other words, the one day when nothing online, even reputable news outlets, can always be trusted.

The history and origins of this holiday are old enough to be unclear, but some leading theories have emerged.  One theory is that the change from winterlike weather to summerlike weather and the rapid shifts in weather typical in spring make people act joyful and a little like fools.  Another theory is that when the West adopted the Gregorian calendar in the 1500s, the New Year started on January 1 instead of March 25, which caused some people to look like fools for not adjusting. Regardless of how the holiday ended up being recognized worldwide, it remains a global phenomenon only made more popular thanks to the Internet.

This holiday of pranks and jokes leads to some funny advertisements for fake products, like last year's Siracha injected Jolly Ranchers. However, there's a dark side to this holiday when the pranks and jokes go a bit too far.

Publications of false material can lead to libel or slander claims, as discussed on this segment last week. Fraud is also a serious issue when it comes to securities and investment marketplaces, as one poor Australian teenager found out two years ago. Kudra Falla-Ricketts was 16 years old when she e-mailed out a fake press release purporting to be from the local gas drilling company, with false statements about how the company planned to pull out of the region.

Even though the press release had multiple typos and was sent from her personal school e-mail account, some people did not take this as a joke. That led to an investigation by the Australian analogue to the SEC, as her prank could have potentially been devastating to the stock value of the drilling company. All of a sudden, this teenager was risking prosecution and penalties for making fraudulent statements! Kudra's case turned out OK, but she is not the first person to make this mistake and cause prosecution by the authorities.

The Bottom Line is, the lesson is clear: when making an April Fools' Joke, it's better to have it be obvious or labeled as such to avoid the chance for any legal consequences. If the joke is funny enough, the disclaimer won't matter.  Moreover, this holiday does provide a net benefit if it makes the more gullible among us appreciate the need for a healthy dose of skepticism at all times, especially when reading things online.

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Thanks for reading. Please provide feedback and legal-themed questions as segment suggestions to me on Twitter @BuckeyeFitzy

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