Referral Marketing — Attorney Pre-Engagement Briefing

Raxx / MooseQuest LLC — Founders Referral Mechanic

Status: RESEARCH ONLY. This document does NOT constitute legal or tax advice. Before acting on any item in this document, consult a licensed attorney with FTC compliance and consumer protection experience in the relevant jurisdictions. Prepared for: Kristerpher (MooseQuest LLC dba Raxx) Prepared: 2026-05-20 UTC Sources current as of 2026-05-20. Verify freshness before attorney meeting.

TL;DR (3 sentences)

The Raxx Founders referral mechanic (pricing-lock extension as referral reward) triggers disclosure obligations under FTC 16 CFR Part 255 (Endorsement Guides, revised June 2023) because the pricing extension is a "material connection" that must be clearly and conspicuously disclosed whenever a referrer promotes Raxx. Pennsylvania's UTPCPL Section 2(4)(xii) contains a separate state-law prohibition on contingent referral compensation that may or may not apply depending on the timing of when the reward vests relative to the referrer's purchase contract — the key legal question for your attorney. The right specialist is an advertising/FTC compliance attorney with consumer protection depth, not an IP attorney; Crosby's engagement does not cover this lane.

1. Product Summary (for attorney handover)

Raxx is a self-directed algorithmic trading platform that lets individual investors build, backtest, and automate rules-based trading strategies. The platform enforces the user's pre-defined entry, credit, and exit rules before market orders are routed to the user's own brokerage account. Raxx does not provide investment advice, does not predict market outcomes, and does not execute trades autonomously — all strategy logic is defined by the user. Raxx is operated by MooseQuest LLC, a single-member LLC organized in Pennsylvania (DBA "Raxx"), and is distributed as a web and iOS application under the brand getraxx.com / raxx.app.

2. The Founders Referral Mechanic — Exact Description

Pricing context: Raxx is launching a Founders promotional tier at $29/month. This price is locked for 6 months for qualifying Founders-period subscribers.

Referral incentive: A Founders subscriber who successfully refers a new paying subscriber (the "referred user") receives a 1-month extension of their own $29 pricing lock. The referrer's locked period extends from the base 6 months by 1 month per successful referral.

What "successful" means: A referral is counted as successful when the referred user completes a paid subscription signup. The reward (pricing-lock extension) vests at that point — after the referrer has already entered their own subscription.

What the referred user receives: The referred user receives no separate discount; they sign up at the standard (or promotional) price available at the time of signup.

Who gets what, summarized: - Referrer: their own pricing lock extended by 1 month per successful referral (a form of discounted future billing) - Referred user: no direct benefit tied to the referral itself - Raxx: a new paying customer

Tracking: The mechanic is implemented in the Raxx platform (PR #2609 — Founders system reconciliation). A referral is tied to the referrer's account and triggers the lock extension via the subscription billing system.

3. Legal Questions to Bring to the Attorney

3.1 Federal — FTC 16 CFR Part 255 (Endorsement Guides, revised June 2023)

Background facts for attorney:

The FTC revised the Endorsement Guides in June 2023 (effective August 2023). The final rule is at:

https://www.ftc.gov/news-events/news/press-releases/2023/06/federal-trade-commission-announces-updated-advertising-guides-combat-deceptive-reviews-endorsements

The full guide PDF:

https://www.ftc.gov/system/files/ftc_gov/pdf/P204500%20Guides%20Concerning%20Endors%20and%20Testimonials.pdf

eCFR current text at 16 CFR Part 255:

https://www.ecfr.gov/current/title-16/chapter-I/subchapter-B/part-255

Relevant regulatory definitions (from 16 CFR 255.5 — Disclosure of material connections):

A "material connection" includes: business relationships, financial relationships, receipt of free or discounted products or services, or any other benefit that a significant minority of consumers would not expect. The Guides specifically include "free or discounted products or services" as examples of material connections requiring clear and conspicuous disclosure.

The FTC FAQ explicitly states (unsourced exact quote — confirm with attorney using primary text):

"If a company gives you a discount on a future purchase and you talk about the product, you should disclose that."

The FTC penalty for failure to disclose is $51,744 per violation as of December 2024 (unsourced exact figure — confirm with attorney using:

https://www.ftc.gov/legal-library/browse/federal-register-notices/16-cfr-part-255-guides-concerning-use-endorsements-testimonials-advertising

Questions for the attorney (FTC layer):

1. Does the Raxx pricing-lock extension (a future billing discount) constitute a "material connection" under 16 CFR 255.5, triggering disclosure whenever a Founders subscriber recommends Raxx to a prospective customer?

2. If yes to (1): What is the required disclosure format and placement — does it need to appear (a) in-app when sharing a referral link, (b) in any social-media post a user makes about Raxx, (c) in email outreach by the user, or all of the above?

3. Does Raxx (as the platform operator) bear liability for a referring user's failure to disclose, or is the disclosure obligation solely on the referrer?

4. Does the FTC's June 2023 revision change the analysis for pricing-based incentives (as opposed to cash or free product incentives)?

5. At what point does the pricing-lock extension become "material" — is the threshold affected by the dollar value (e.g., $29/month extension vs. a $200 cash payment)?

6. Does Raxx need to affirmatively prevent or monitor undisclosed referral endorsements by subscribers to avoid FTC exposure?

7. What does a compliant referral-disclosure UI/UX look like — specific wording, placement, timing requirements?

3.2 Pennsylvania State Law — UTPCPL Section 2(4)(xii)

Background facts for attorney:

Pennsylvania's Unfair Trade Practices and Consumer Protection Law (UTPCPL), Act of December 17, 1968 (P.L. 1224, No. 387), Section 2(4)(xii) states:

"Promising or offering prior to time of sale to pay, credit or allow to any buyer, any compensation or reward for the procurement of a contract for purchase of goods or services with another or others, or for the referral of the name or names of another or others for the purpose of attempting to procure or procuring such a contract of purchase with such other person or persons when such payment, credit, compensation or reward is contingent upon the occurrence of an event subsequent to the time of the signing of a contract to purchase."

Primary source:

https://www.legis.state.pa.us/WU01/LI/LI/US/HTM/1968/0/0387..HTM

Questions for the attorney (UTPCPL layer):

8. Does the Raxx pricing-lock extension fit the UTPCPL Section 2(4)(xii) definition of a prohibited contingent referral reward? Specifically: the referrer has already signed (subscribed) before the reward vests — does the "subsequent to the time of signing" timing element apply here?

9. If Section 2(4)(xii) applies: does the UTPCPL's 2024 cost-provision update (effective July 2024 — PA budget provision permitting courts to award OAG investigation costs) materially change Raxx's risk exposure?

10. Does the UTPCPL apply to a SaaS subscription service offered over the internet to Pennsylvania residents, or does the digital/interstate nature of the product affect applicability?

11. Are there UTPCPL-compliant referral structures (e.g., reward vesting at time of referrer's signup, or a per-transaction reward structure) that achieve the same business goal?

12. Does the Philadelphia ordinance enacted September 2024 (re: unfair or deceptive trade practices) create any separate exposure for Philadelphia-based Raxx customers who are also referrers? Source:

https://www.morganlewis.com/pubs/2024/09/philadelphia-enacts-ordinance-to-protect-residents-from-unfair-or-deceptive-trade-practices

3.3 Multi-State Consumer Protection Layer

Background: Raxx operates nationally. Users can be in any U.S. state at signup. Some states have their own referral-marketing or incentive-disclosure statutes beyond the UTPCPL.

Questions for the attorney:

13. Which other states (beyond PA) have referral-compensation statutes analogous to UTPCPL Section 2(4)(xii) that Raxx should evaluate before national launch?

14. New Jersey has enacted auto-renewal disclosure rules for subscription services (source below). Does NJ's subscription regulation interact with Raxx's referral mechanic in any way?

https://perkinscoie.com/insights/update/new-jersey-regulate-automatically-renewing-subscription-services

15. Should the Raxx Terms of Service or referral program Terms contain specific state carve-outs, or is a unified federal-disclosure approach sufficient for v1 launch?

3.4 Testimonial and Social-Share Copy Risk

Background: When users share referral links, they may also share opinions about Raxx (e.g., "I love this platform, sign up with my link"). The FTC's 2023 Endorsement Guides apply to these organic endorsements when made by someone with a material connection (the pricing-lock incentive).

Questions for the attorney:

16. Does Raxx need to include disclosure-reminder language in the in-app referral share flow (e.g., "Note: if you share your link on social media, FTC rules require you to disclose that you benefit from referrals")?

17. Does Raxx need a written referral program policy that users must agree to, governing how they are permitted to promote their referral link?

18. If a Founders subscriber creates a YouTube video or blog post recommending Raxx without disclosing the pricing incentive, and that video drives signups — what is Raxx's exposure?

4. Attorney Profile Required

4.1 Specialty — What to Look For

Primary specialty (required): - FTC advertising and consumer protection compliance - Endorsement Guides (16 CFR Part 255) — specifically incentivized referral programs - State UTPCPL or equivalent consumer protection law

Secondary specialty (preferred, can be same attorney or a consult): - Multi-state consumer protection law (national SaaS launch context) - Promotional marketing law (sweepstakes/contest experience is a useful proxy)

What this is NOT: - IP / trademark (Crosby's lane — do not ask Crosby to cover this) - Securities law (separate counsel engaged per existing project records) - Privacy / data protection (GDPR / CCPA — separate lane)

4.2 Can a Single Attorney Cover This?

Likely yes for a v1 scoping engagement, with caveats:

• FTC federal layer + PA state layer: most consumer protection attorneys in PA / NY / NJ handle both; the federal/state overlap is routine for this specialty
• Multi-state expansion (question 13 above): may require a second attorney in states with unusual statutes (CA, TX, FL are the common outliers)
• Recommendation: engage one lead attorney for the FTC + PA analysis; ask them at first meeting whether they can cover multi-state or need to hand off

4.3 Hourly Rate Estimates — 2026 Market

These are research estimates only. Actual rates vary by firm, attorney seniority, and engagement type. Source for PA ranges:

https://www.clio.com/resources/legal-trends/compare-lawyer-rates/pa/

Estimated engagement cost for scoping + program review:

A focused engagement (review the referral mechanic, answer questions 1–18 above, produce a written compliance memo + recommended disclosure language) typically runs 8–20 hours at a boutique advertising-law firm.

Estimated range: $3,500–$14,000 depending on firm and whether multi-state analysis is included.

If the attorney recommends structural changes to the referral program or drafts updated Terms of Service language, add $2,000–$5,000.

Total estimated engagement: $5,500–$19,000 for a complete v1 clearance.

5. Candidate Firms and Attorneys (5 Profiles)

These are research candidates only. This is not a recommendation that Kristerpher retain any of these firms. Conduct your own due diligence before engaging.

Candidate 1 — Hinch Newman LLP (Top Recommendation)

Firm: Hinch Newman LLP Offices: New York, NY (primary) | San Diego, CA Phone (NY): 212-756-8777 Website:

https://www.hinchnewman.com/practice-areas/internet-law/ftc-and-state-attorney-general-regulatory-compliance-investigation-and-litigation-defense/

Specialty match: - FTC compliance and endorsement guide compliance (stated core practice) - Digital marketing, performance marketing, affiliate and referral programs - AG investigations and consumer protection defense (multi-state) - Explicitly serves tech entrepreneurs, startups, e-commerce, lead generators

Why this firm for Raxx: Hinch Newman is a boutique that specifically focuses on the digital performance marketing / referral / endorsement compliance lane — which is precisely the Raxx question. They have represented a client in an FTC Civil Investigative Demand specifically examining deceptive practices in connection with endorsements and referrals. The firm has represented clients in FTC investigations with prompt closure and no monetary penalty. Their stated fees are "less than many attorneys with similar experience" — relevant given startup budget.

Engagement model: No published rates. Startup-friendly language on site. Expected: hourly with possible flat-fee scoping option. Response time for intake: typically within 2–3 business days.

Limitation: No PA office; federal FTC analysis and NY/NJ consumer protection is their core. PA-specific UTPCPL analysis may need confirmation of their PA coverage or a PA referral.

Candidate 2 — Olshan Frome Wolosky LLP — Advertising, Marketing & Promotions Group

Firm: Olshan Frome Wolosky LLP Offices: New York, NY | New Jersey (multiple offices) Practice lead: Andrew Lustigman (chairs the Advertising, Marketing & Promotions Group) Website:

https://www.olshanlaw.com/capabilities/practices/Advertising-Marketing-Law

FTC endorsement blog:

https://olshanlaw.com/resources-alerts-FTC-Issues-New-SocialMedia-Guidance.html

Specialty match: - FTC advertising and endorsement compliance (Chambers USA and Legal 500 ranked) - Referral and affiliate program compliance - Direct marketing law, state AG defense - Sweepstakes and promotions (30+ years — useful proxy for incentive program structure)

Why this firm for Raxx: Olshan is a recognized leader in advertising law. Lustigman is consistently named to "best advertising lawyers" lists. NJ office means the firm has PA-adjacent state consumer protection coverage. Olshan actively publishes on FTC endorsement guide changes.

Engagement model: No published rates. Chambers-ranked firm — expect NY large-firm rates ($450–$650/hr at partner level). May have associate-staffed options for defined scoping work. Contact via firm intake form on website.

Limitation: Partner-heavy rates may exceed startup budget for a broad engagement. Negotiate a scoped memo engagement.

Candidate 3 — Kelley Drye & Warren LLP — Advertising Counseling and Compliance

Firm: Kelley Drye & Warren LLP Offices: New York (primary) | Washington DC | Chicago | Stamford CT | Madison NJ | Los Angeles | Houston | San Diego Practice: Advertising Counseling and Compliance Blog (Ad Law Access):

https://www.kelleydrye.com/viewpoints/blogs/ad-law-access/federal-trade-commission-ftc/

Website (advertising practice):

https://www.kelleydrye.com/Our-Practices/Regulatory-Government-Relations/Advertising-Counseling-and-Compliance

Specialty match: - FTC consumer protection and advertising — 5 former FTC officials on team including former Director of the Bureau of Consumer Protection - Endorsement guide compliance — has published specific guidance on updated FTC endorsement guides and referral program implications - "Unparalleled record of success negotiating with regulators to close investigations amicably, including dozens of cases over the last decade" (firm's own description — verify independently) - Multi-state consumer protection

Why this firm for Raxx: Former FTC insider knowledge is directly relevant to the referral-mechanic-as-material-connection question. Kelley Drye's Ad Law Access blog has published specifically on the 2023 FTC Endorsement Guide updates for referral programs. NJ office means PA-adjacent coverage.

Engagement model: Large Am Law 200 firm; expect $500–$700+/hr at partner level. May offer a flat-fee compliance review for defined-scope engagements. Response time: 1–3 business days via website intake.

Limitation: Larger firm = potentially higher cost. Best fit if Raxx wants the most authoritative FTC memo or anticipates any regulatory inquiry.

Candidate 4 — Mac Murray & Shuster LLP — Advertising & Marketing Compliance

Firm: Mac Murray & Shuster LLP Offices: Multiple (specific addresses not publicly listed on website; confirm at intake) Website:

https://mslawgroup.com/practice-areas/advertising-and-marketing/

Specialty match: - Former consumer protection regulators (regulatory enforcement perspective) - FTC endorsement compliance, dark patterns, disclosure compliance - Financial services advertising experience (relevant given Raxx's trading-platform context) - Serves startups to Fortune 50

Why this firm for Raxx: Mac Murray & Shuster's former-regulator background means they understand what the FTC prioritizes for enforcement — valuable when assessing whether Raxx's specific mechanic is enforcement-risk-level or routine-disclosure territory. Financial services advertising experience means they understand the combination of trading platform + consumer incentive program.

Engagement model: No published rates. Explicit statement of serving startups. Likely more flexible on scoped flat-fee engagements. Contact via website form.

Limitation: Office locations not prominently disclosed; confirm PA / NJ reach. Less public-facing publication history on referral programs specifically.

Candidate 5 — Amin Wasserman Gurnani LLP (AWG Law) — FTC & State Advertising Compliance

Firm: Amin Wasserman Gurnani LLP Offices: Chicago, IL | Washington, DC | Los Angeles, CA Website:

https://awglaw.com/practices/ftc-state-advertising-compliance/

Specialty match: - FTC and state AG advertising compliance - Endorsement guides and influencer/referral compliance (published on 2023 updates) - NAD (National Advertising Division) defense - Multi-jurisdictional strategy

Why this firm for Raxx: AWG has a DC office which is useful proximity for FTC-focused compliance work. They have published on TikTok affiliate endorsement compliance (referral-adjacent). DC office staff often have FTC familiarity from proximity.

Engagement model: No published rates. "Companies of all sizes" stated client base. Contact via website.

Limitation: No PA or NJ office. PA UTPCPL analysis would require either a PA referral or confirming their multi-state consumer protection coverage. Not PA-adjacent; may be a second-opinion option rather than lead engagement.

6. Options Compared

7. Jurisdiction Flags

Priority jurisdiction: Pennsylvania first (home state + incorporation state). Federal FTC second (national launch). California third if Raxx accepts CA users at launch.

8. Timing and Deadlines

Recommended timeline: Attorney engagement within 5–10 business days. Do not launch the public referral mechanic until attorney has reviewed and cleared (or recommended structural modifications).

9. What Crosby Does NOT Cover

Matthew Crosby (currently engaged, IP/trademark focus) is not the right attorney for this matter. This briefing is specifically for a new engagement. Do not ask Crosby to provide opinions on:

• FTC endorsement guide applicability
• UTPCPL Section 2(4)(xii)
• Referral program incentive structure
• Consumer protection multi-state compliance

Crosby's lane: trademark clearance, IP assignment, copyright matters. This lane: advertising/consumer protection/FTC compliance. These are distinct specialties.

10. Recommended Immediate Next Step for Kristerpher

1. Send this document to the attorney you engage at intake (it serves as the briefing).
2. At first meeting, ask for a written compliance memo (not just verbal advice) covering: - Whether the pricing-lock extension is a "material connection" under 16 CFR 255.5 - Whether UTPCPL Section 2(4)(xii) applies and what (if any) structural change is needed - Specific recommended disclosure language for in-app referral share flow - Recommended referral program Terms of Use language
3. Ask whether a flat-fee engagement is available for a defined-scope compliance memo.
4. Before the attorney meeting, do not publicly announce or activate the referral mechanic.

Sources

https://www.ftc.gov/news-events/news/press-releases/2023/06/federal-trade-commission-announces-updated-advertising-guides-combat-deceptive-reviews-endorsements

https://www.ftc.gov/business-guidance/advertising-marketing/endorsements-influencers-reviews

https://www.ecfr.gov/current/title-16/chapter-I/subchapter-B/part-255

https://www.law.cornell.edu/cfr/text/16/255.5

https://www.ftc.gov/system/files/ftc_gov/pdf/P204500%20Guides%20Concerning%20Endors%20and%20Testimonials.pdf

https://www.ftc.gov/legal-library/browse/federal-register-notices/16-cfr-part-255-guides-concerning-use-endorsements-testimonials-advertising

https://www.legis.state.pa.us/WU01/LI/LI/US/HTM/1968/0/0387..HTM

https://www.attorneygeneral.gov/wp-content/uploads/2018/02/Unfair_Trade_Practices_Consumer_Protection_Law.pdf

https://www.cohenseglias.com/news-article/pa-unfair-trade-practices-and-consumer-protection-law-investigations-frequently-asked-questions/

https://www.cohenseglias.com/investigations-compliance-blog/unfair-trade-practices/new-legal-challenge-for-pennsylvania-businesses-navigating-the-updated-utpcpl-cost-provisions/

https://www.morganlewis.com/pubs/2024/09/philadelphia-enacts-ordinance-to-protect-residents-from-unfair-or-deceptive-trade-practices

https://perkinscoie.com/insights/update/new-jersey-regulate-automatically-renewing-subscription-services

https://www.hinchnewman.com/practice-areas/internet-law/ftc-and-state-attorney-general-regulatory-compliance-investigation-and-litigation-defense/

https://www.olshanlaw.com/capabilities/practices/Advertising-Marketing-Law

https://www.kelleydrye.com/Our-Practices/Regulatory-Government-Relations/Advertising-Counseling-and-Compliance

https://www.kelleydrye.com/viewpoints/blogs/ad-law-access/ftc-updates-faqs-for-endorsement-guides-offers-more-guidance-on-social-media-and-video-endorsements

https://mslawgroup.com/practice-areas/advertising-and-marketing/

https://awglaw.com/practices/ftc-state-advertising-compliance/

https://www.clio.com/resources/legal-trends/compare-lawyer-rates/pa/

https://www.afslaw.com/perspectives/the-fine-print/advertising-law-compliance-2026-five-developments-every-advertiser

https://www.prefinery.com/blog/ftc-endorsement-guides-for-referral-programs/

Before filing or acting on anything in this document, consult a licensed advertising / consumer protection attorney with FTC compliance experience, admitted in Pennsylvania (for UTPCPL) and familiar with federal FTC enforcement practice. This document is a research briefing only.