- Paul Pierce, former NBA star, settled with the SEC for $1.4 million over allegations of unlawfully touting and making misleading statements about a crypto asset security, EthereumMax (EMAX).
- The SEC charged Pierce for promoting EMAX tokens on Twitter without disclosing that he was paid for his promotion with EMAX tokens worth more than $244,000.
- Pierce will pay a $1.1 million penalty, disgorge approximately $240,000, and is barred from promoting any crypto asset securities for three years.
Pierce settles with SEC
Recently, there has been a lot of news about celebrities getting in trouble with the Securities and Exchange Commission (SEC) for promoting crypto securities without disclosing their compensation. One of the latest celebrities to face this issue is Paul Pierce, a former NBA star who settled with the SEC for promoting EthereumMax (EMAX).
Pierce was accused of unlawfully touting and making misleading statements about EMAX, the same crypto security product that the SEC charged Kim Kardashian with unlawfully touting. Pierce promoted EMAX tokens on Twitter while failing to disclose that he was paid for his promotion with EMAX tokens worth more than $244,000, according to the SEC.
The SEC alleged that Pierce shared misleading screenshots of his EMAX holdings and profits on social media without disclosing that his personal holdings were actually far lower. As part of the settlement, Pierce will pay a $1.1 million penalty and disgorge approximately $240,000. He is also barred from promoting any crypto asset securities for three years.
Kim Kardashian was charged by the U.S. Securities and Exchange Commission (SEC) for promoting EthereumMax (EMAX) on her social media accounts without disclosing that she was paid to do so. The SEC alleged that Kardashian failed to disclose that she was paid $300,000 to promote EMAX to her millions of followers on Instagram, just weeks after the token was launched.
The SEC’s order against Kardashian stated that she misled investors by not disclosing that she was being paid to promote the cryptocurrency. The order also alleged that Kardashian made false and misleading statements about the nature of EMAX, its potential for growth, and the amount of her own holdings in the cryptocurrency.
Kardashian settled with the SEC for $1.2 million in October 2021. She also agreed to promote any future investments and securities in a truthful manner and to disclose any compensation received for such promotions.
Reminder to Celebs
This case is a reminder to all celebrities that the law requires them to disclose to the public from whom and how much they are getting paid to promote investment in securities, and they cannot lie to investors when they tout a security. The SEC has been more aggressive with its enforcement action in the crypto space and has charged several companies and individuals for fraud and other violations.
It is important for everyone in the crypto industry to stay vigilant and compliant with regulations. As a consultant, I advise my clients to always disclose their compensation when promoting any crypto asset securities and to avoid making any misleading statements. By doing so, we can help build a more transparent and trustworthy crypto industry for all.