The U.S. Securities and Exchange Commission (SEC) has charged Basketball Hall of Famer Paul Pierce for promoting EMAX tokens and making misleading comments about unregistered crypto securities. The former Boston Celtics small forward agreed to settle the charges and pay the SEC $1.49 million.
SEC Chairman Gary Gensler wants to remind celebrities about disclosure laws
The top U.S. securities regulator has chargedformer Boston Celtics forward Paul Pierce for illegally promoting a cryptocurrency project calledEthereummax and the token EMAX. The SEC’s charges against Pierce follow fierce enforcement action by U.S. regulators against Staking Services, the Acquisition Program, Stablecoin, and Do Kwon’s Terra blockchain ecosystem.According to the SEC’s complaint, Pierce “used Twitter to promote the token failed to disclose that he was paid more than $244,000 worth of EMAX tokens to promote the tokens.”
Pierce agreed to settle the complaint with the SEC for a $1.49 million fine, disgorgement, and interest. The complaint further alleges that in one tweet, Pierce shared a screenshot of profits far below his personal holdings. In another tweet, he shared the Ethereum Max Project website and directed people to a portal to purchase EMAX tokens. Pierce is not the only celebrity fined by the SEC for illegally promoting the Ethereum Max Project and related tokens and misleading investors.
In October 2022, socialite Kim Kardashian was charged with illegally promoting the crypto asset EMAX. At the time, Kardashian also settled with the SEC for a penalty of $1.26 million. In a statement on the Pierce charges, SEC Chairman Gary Gensler claimed that the case was “another reminder to celebrities.” Gensler continued, “The law requires you to disclose to the public who and how much you are paid to promote investments in securities, and you cannot lie to investors when you pitch securities.” He stated.
The regulators further stated that
when a celebrity recommends an investment opportunity involving crypto asset securities, investors should carefully investigate whether the investment is appropriate for them and should know why the celebrity is making that recommendation.
The SEC’s complaint noted that the Basketball Hall of Fame violated the anti-touting and anti-fraud provisions of the federal securities laws. The basketball star settled with the SEC on a non-admission or denial basis and pledged not to promote any crypto assets for three years; the SEC further cautioned investors to watch Gensler’s video about not investing “solely based on the recommendations of celebrities and influencers.” It urged.
What are your thoughts on the SEC’s recent enforcement actions against celebrities promoting crypto assets and its insistence on the need for full disclosure to the public? Share your thoughts.
