Mark this event as a small signpost to the Dead Man's Curve we are approaching as a society. A rapper named 50 Cent posted on his Twitter page that all his 3.8 million Twitter fans should buy shares in H&H, a company in which the rapper owns stock. H&H's shares subsequently skyrocketed by 290 percent, as his Twitter fans apparently did what he suggested.
Now 50 Cent is in trouble with the Fed. He may have done something illegal to artificially boost stock in the company. But what exactly did he do wrong? Is it insider trading to make a public statement on a public facing page about stock that you own? I don't think the Fed would care if I made such a statement on this obscure blog. It was the size of the audience he was reaching, the speed with which he reached it, and the immediate effect his suggestion had on the stock's performance that caused the Fed to take notice.
There are all kinds of legal gray areas when it comes to the electronic world. Privacy and copyright infringement concerns immediately come to mind. It doesn't seem our laws are keeping pace with the rate of change that is going on in society.
So how do you change a legal system that is antiquated, overly complex, and deeply embedded in the culture? I don't believe you can. New technologies always create loopholes in laws that can be overtly or innocently exploited.
When the legal system catches up to restrict celebrity stockholders from posting stock tips on their Twitter pages, the next new technology will already be creating new opportunities for exploitation. As the speed of change accelerates, that gap will only grow. The only thing the government could do is try to clamp down on the Internet. If they do, it will herald a new Dark Age. If they don't (a far more preferable outcome), democracy as we know it will be broken and what comes next is anyone's guess.
