Advisor Ross Gerber is an outspoken presence online. He co-founded Gerber Kawasaki in Santa Monica, Calif., in 2010 with partner Danilo Kawasaki, and he credits his constant presence on social media and cable news with helping the firm’s assets under management grow to $2.5 billion.

But that effort cut both ways: He also found that you can pay a steep price with regulators for fighting public battles on Twitter (the platform that recently became “X.”)

In 2022, Gerber waged a very public campaign to get on Tesla’s board in protest over CEO Elon Musk’s alleged “distraction,” when Musk sought to purchase the social media platform Twitter, a deal finished in October of last year. The share price of Tesla tumbled 75% from November 2021 to early January of this year, in part, said analysts, because of the perceived Twitter distraction as well as other problems plaguing the carmaker. Gerber waged his campaign in TV interviews and on Twitter, asking followers if they supported his campaign for a board seat. Some 20,000 of his 330,000 followers answered yes.

But the partners of Gerber Kawasaki also found out the hard way that old tweets made to Gerber’s Twitter account could come back to bite them. When the firm was undergoing a Securities and Exchange Commission audit, the examiners began looking for coordinated firm-wide trading patterns, and they combed through old tweets.

“We just had an SEC audit last year which came at the bottom of the market. They decided to go through my social media, so, yes, it was really fun,” Gerber says. “They pulled out a bunch of tweets discussing stocks from 2021 when things were crazy, so it was a little bit of a wild period of time. I tweeted some things in hindsight I probably shouldn’t have, like ‘I really like this stock and we’re buying it.’ But when they looked, there was no correlation between what I said and what our 27 advisors were buying,” Gerber adds.

“So now, if I go on TV and talk about how much we like Tesla, our employees can’t trade for 24 hours. If I have 50 interviews in a week, we try to warn the team ahead of time,” Gerber says. The trading halt is for employees and related accounts only.

According to Kawasaki, who is vice president, chief operations officer and chief compliance officer at the firm, “Ross has a big mouth, but it’s all coming from a good place. Our audit is not finalized. We submitted everything they requested, but we’re waiting for closure,” he says.

“For everyone here, the most important thing is our fiduciary responsibility to clients. Ross can go on TV and say great things about Tesla, but our job in managing client assets is very individualized, so certainly there are no trading patterns spurred by him doing TV appearances,” Kawasaki says.

He adds that the free exposure Gerber garnered on Twitter and cable news has been invaluable to the growth of the firm, which he predicts will add $500 million in assets by the end of the year.

“I think it shows our personality and the fact that we’re human beings with opinions and we’re not afraid to take a stance on things that we believe in,” Kawasaki says. “We understand that it may alienate people and they’re probably the people who aren’t a great fit for us and vice versa.”

Gerber’s bid to join Tesla’s board was ultimately unsuccessful, and he admits now that the backlash and shunning from outraged fellow Teslaholics were painful. But he insists he ran a “hugely successful activist campaign.” He flew to the company’s headquarters in Austin, Texas, and listened as the board rolled out its business plan, which included Musk’s promise to create a succession plan, start advertising and not sell any more stock—all changes Gerber says he campaigned for.

All told, Gerber Kawasaki owns about $100 million in Tesla shares, with another $1,468,833.96 held in the AdvisorShares Gerber Kawasaki ETF (GK), an actively managed growth fund, subadvised and managed by Gerber. The fund is beating the S&P 500’s 16.8% return year-to-date with a 19.9% return, though it’s down some 14.8% since its inception on July 1, 2021, while the index has returned a positive 3.1%.

As far as the requirement that the firm halts trading for 24 hours after a TV spot, one compliance specialist, Buddy Doyle at Oyster Consulting, says those cooling off periods aren’t unusual for advisors touting stocks.

“The more sensational you are and the bigger your following on social media, the more likely you are to garner regulatory attention,” says Doyle, Oyster’s CEO. “You become a known entity and the SEC is looking for things that influence the market inappropriately.”

Doyle also notes that dually registered advisors may need to get approval for social media posts from their broker-dealers, while RIA firms have more leeway. In any case, they must be “fact-based and true” in their assertions.

One way to add a layer of regulatory protection in blogs and social posts is to express your views as opinions, rather than facts, and refrain from promising an outcome. Even adding “I think” before or after statements can be helpful, Doyle says.

“Getting into politics is an interesting part of social media,” he says. “If you look at Gallup polls, there is a pretty close split between Republicans and Democrats, so you run the risk of turning off a fairly significant portion of the population. But you don’t need everyone.”