Creator Liability in Real Estate Raises: Key Cases

Creators who promote investments can be held responsible for what they say. A federal appeals court has held that promoting a security in a mass communication can make the promoter liable as a seller, and the SEC has penalized a celebrity for an undisclosed paid post. These cases give creators a practical checklist of what to avoid.

New to this? Start with our guide to how creators raise money from followers for real estate.

Case 1: Pino v. Cardone Capital

Investors sued over real estate funds that were promoted on social media. The Ninth Circuit's opinion held that "a person can solicit a purchase, within the meaning of the Securities Act, by promoting the sale of a security in a mass communication." The case is a reminder that posts and videos aren't just marketing. They can be used as evidence of what you promised.

Case 2: Kim Kardashian and Section 17(b)

Section 17(b) of the Securities Act requires anyone who promotes a security for pay to disclose the payment and its amount. The SEC found that Kardashian was paid $250,000 for an Instagram post and didn't disclose it. She agreed to pay $1.26 million, made up of a $1 million penalty and about $260,000 in disgorgement and interest, without admitting or denying the SEC's findings. The lesson for real estate is that paid promotion needs clear, prominent disclosure.

Case 3: Unregistered sales agents

In a 2026 order, the SEC found that a sales agent for a real estate note offering acted as an unregistered broker and was paid commissions. According to the order, the offering was a Ponzi scheme that raised at least $56 million from about 660 investors, and the agent was sanctioned. The point isn't that every unregistered promoter is part of a fraud. It's that transaction-based pay draws attention. See paying capital raisers.

What creators can learn

Each case points to a safer practice, summarized below.

Risk	Safer practice
Promising returns in public posts	Keep projections in documents, with risks
Undisclosed pay	Disclose pay and amount every time
Commission per investor	Don't, unless registered
Taking money into your own account	Use escrow
Skipping verification under 506(c)	Verify every investor
Hype and urgency	Plain facts and a link to the full terms

How liability can reach you

Possible exposure includes SEC enforcement, state securities regulators, investor lawsuits and rescission claims. The details depend on your role and facts, so ask a securities attorney.

Who this isn't for

This isn't a prediction that creators will be sued. The cases show where liability can come from, and your own exposure depends on your role, your statements and your facts.

How DoorRaise helps

DoorRaise's posting rules apply to every public deal, every deal page shows the same fee card and the sponsor's track record, and escrow keeps investor money away from the sponsor until closing.

DoorRaise is for apartment buildings with 5 or more units. Start your deal or see pricing.

These guides cover the next questions most readers have.

FAQ

Can a creator be liable just for posting about a deal?

Potentially. Pino held that promoting a security in a mass communication can count as soliciting its purchase, which let the investors' claims go forward. It didn't decide liability.

Do I have to disclose that I'm paid?

Yes, if you're paid to promote a security, including the amount, under Section 17(b).

Is a private offering exempt from fraud rules?

No. Antifraud rules apply to every securities offering.

Has the Cardone case been decided?

Not as of October 2026. Trial was reported as scheduled for March 9, 2027.

Sources

This post is general information, not legal advice. Talk to a securities attorney before you market an offering. DoorRaise is not a broker-dealer, investment adviser or funding portal.