Published on January 31st, 20190
Will the Fyre Starters Finally Get Burned?
The disaster that was the Fyre Festival provides an instructive example. According to the festival pitch deck, the organizers compiled “400 of the most influential personalities globally to launch a coordinated influencer marketing campaign.” And these Fyre Starters certainly did light the spark on social media.
The problem was, it appears that the vast majority of these global personalities failed to disclose their material connections to the organizers of the event. And when things started to go terribly wrong in the Bahamas, as chronicled in new Netflix and Hulu documentaries, many in the Fyre tribe quickly deleted their promotional posts, making it difficult to capture and expose their deceptive marketing.
Two weeks after the Fyre died, at least seven class-action lawsuits were filed, with one targeting some of the influencers who promoted the event. But the primary goal in all of these lawsuits was to provide monetary compensation to the class of consumers, and not change the marketing habits of influencers. As it currently stands, five of the lawsuits have been consolidated and are still pending, and two have been dismissed (including the one that implicated social media influencers). One additional case appears to have ended in a $5 million settlement for two plaintiffs.
In June 2017, William “Billy” McFarland, the mastermind behind the Fyre Festival, was criminally charged with carrying out a scheme to defraud investors. After pleading guilty, he was sentenced to six years in prison and assessed a monetary judgment in excess of $26 million. A month after McFarland was charged, his company, Fyre Festival LLC, filed for bankruptcy.
Last week we learned that the trustee in the bankruptcy case will be permitted to examine certain financial documents to learn more about the money paid to some Fyre influencers. Specifically, the trustee has obtained a court order to review the Fyre Festival’s payment of $1.2 million to IMG Models, $299,000 to DNA Model Management and $275,000 to Kendall Jenner, among other transactions. As the trustee noted, “examinations are appropriate for revealing the nature and extent of the bankruptcy estate and for ‘discovering assets, examining transactions, and determining whether wrongdoing has occurred.’”
Perhaps, just maybe, the trustee will discover that some highly paid Fyre Starters violated FTC law by not disclosing their material connection to the festival and should be made to return their ill-gotten gains back to the bankruptcy estate. If the trustee needs help, here’s a few Instagram posts that might just be useful.
Find more of our coverage on influencer marketing here.