Friday Wake-Up Call: The SEC goes after Elon Musk, and prosecutors probe media-buying

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Elon Musk last year during a presentation in Australia.
Elon Musk last year during a presentation in Australia. Credit: Mark Brake/Getty Images

Welcome to Ad Age's Wake-Up Call, our daily roundup of advertising, marketing, media and digital news. You can get an audio version of this briefing on your Alexa device. Search for "Ad Age" under "Skills" in the Alexa app. What people are talking about today: Elon Musk's Twitter habit might be his undoing. After the Tesla CEO tweeted last month that he had "funding secured" to take Tesla private, the U.S. Securities and Exchange Commission accused him of fraud and making false statements that could hurt investors. As The New York Times writes, the suit filed in federal court in Manhattan also attempts to prevent Musk from serving as an executive or director at a publicly traded company. And he could be removed from Tesla. The Times writes:

"Such a punishment is one of the most serious remedies the S.E.C. can impose against a corporate executive. The case is likely to send shock waves across corporate America and could lead to a re-evaluation of how companies use Twitter to communicate with the investing public."

Musk said the lawsuit was unjustified and said he has always "taken action in the best interests of truth, transparency and investors." His comments were distributed the old-fashioned way—not from his personal Twitter account, but via a statement from his company.

Media rebates
U.S. media-buying is under scrutiny again, with federal prosecutors in Manhattan reportedly looking at shadowy practices such as media agencies getting rebates from media sellers. The Wall Street Journal reports that the prosecutors have opened an investigation into U.S. media-buying practices and have handed out subpoenas. The Journal, which cites unnamed people familiar with the matter, says one agency group being looked at is Vivendi's Havas; the company declined to comment to The Journal. The report adds that "the Federal Bureau of Investigation has been interviewing people in the ad business about ad-buying practices and about a 2016 investigation of the industry commissioned by the Association of National Advertisers."
That investigation, carried out by independent firm K2 Intelligence, found that rebates and "other non-transparent practices" were prevalent in U.S. media-buying. It didn't single out any particular agencies, and agency groups contested its findings. There are differing perspectives on how the situation has evolved. In April, a McKinsey & Co. report argued that things haven't changed much; the Association of National Advertisers retorted that they have.

'Unfair'
Hundreds of actors from the SAG/AFTRA union demonstrated outside the BBH office in Los Angeles on Thursday, toting protest signs and one of the giant inflatable rats common at union protests. (Watch footage from the demonstration here, courtesy of Ad Age's Ann-Christine Diaz and Max Sternlicht.) Protesters were angry that BBH, the Publicis Groupe-owned creative agency, ended its contract with the union after two decades as a signatory. Many carried signs with the message the move was "Unfair."
It's the latest flareup of tensions between the union and the ad industry. A few years ago the union singled out Droga5, a non-union shop. Now it has called a strike to ask its members to stop working for BBH. The agency says that being a signatory to the SAG/AFTRA contract makes it hard to compete with other shops that haven't signed on. BBH also released a statement saying it honors SAG-AFTRA's right to demonstrate, while affirming its own "legal right to not renew our participation" in the contract.

Just briefly:
Time's Up:
As Christine Blasey Ford and Supreme Court nominee Brett Kavanaugh prepared to testify yesterday, "Time's Up released a video of more than a dozen women speaking with a single message for the would-be justice: withdraw," writes Ad Age's I-Hsien Sherwood. The video was made by members of Time's Up Advertising, an offshoot of the main Time's Up movement. Watch it here.

Out: Kevin Jackson was terminated as a Fox News contributor after he tweeted about Supreme Court justice nominee Brett Kavanaugh's accusers and referred to them as "lying skanks," Variety reports.

Murphy + Hillary: Hillary Clinton made a cameo on CBS' rebooted "Murphy Brown," playing a woman who interviews to be the title character's secretary, The Daily Beast writes. To preserve the surprise, critics "were furnished Thursday night's premiere in advance without Clinton's cameo," The Daily Beast says.

Goodbye: Gil Schwartz, CBS communications chief, will retire Nov. 1, Variety reports. Schwartz also writes columns and books under the pen name Stanley Bing.

Playing defense: Barstool Sports CEO Erika Nardini defended the website after a Daily Beast article portrayed it as hotbed of sexual harassment and misogyny. "Do I wish that these guys would bite their tongue or hold back sometimes?" she wrote in a blog post. "As a businesswoman, yes, maybe. As a CEO, and a fan of the brand in general, I know that is not how they operate." Read more from Bloomberg News.

Momentum: Fox just hosted its first "Thursday Night Football" broadcast, and "the network believes it has the ratings momentum and the sort of powerhouse schedule that will transform the much-maligned NFL window into appointment viewing," writes Anthony Crupi in Ad Age.

Actually: Atlanta-based craft brewer Scofflaw put out a release promising free beer to Trump supporters at an event in the UK. But the brand's partner in Scotland was furious, and the giveaway isn't happening, as E.J. Schultz writes in Ad Age. Scofflaw blamed its PR agency.

Enter sandman: Metallica played at Dreamforce, Salesforce's huge conference in San Francisco. As George Slefo writes in Ad Age. Metallica wasn't just the house band—it also uses Salesforce's Marketing and Commerce clouds.

Creativity pick of the day: Burger King launched some absurdly funny new ads poking fun at the fervor for AI. Ad Age's Jessica Wohl writes that BK claims to be testing "a new deep learning algorithm that could give a glimpse into what the future of marketing and communications could look like." The joke is that the ads are … ridiculous. One ad, with a voiceover in a robot voice, proclaims that the Whopper is "flame-grilled, just like you." And "the Whopper lives in a bun mansion, just like you." The signoff is "Burger King. Have it Uruguay." The spots are here. Enjoy.

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