The U.S. Securities and Exchange Commission (SEC) has charged Basketball Hall of Famer Paul Pierce for touting 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 $1.409 million.
SEC Chair Gary Gensler Wants to Remind Celebrities of Disclosure Laws
The U.S.’s top securities regulator has charged former Boston Celtics forward Paul Pierce for unlawfully touting the cryptocurrency project called Ethereummax and the token EMAX. The Securities and Exchange Commission’s charges against Pierce follow an onslaught of enforcement actions by U.S. regulators against staking services, earn programs, stablecoins, and Do Kwon’s Terra blockchain ecosystem. According to the SEC complaint, Pierce “failed to disclose that he was paid more than $244,000 worth of EMAX tokens to promote the tokens on Twitter.”
Pierce agreed to settle the charges with the SEC for $1.409 million in penalties, disgorgement, and interest. The complaint further asserts that in one tweet, Pierce shared a screenshot of profits that were much lower than his personal holdings. Another tweet shared the Ethereummax project’s website, which led to a portal to purchase EMAX tokens. Pierce is not the only celebrity whom the SEC has fined for unlawfully touting and misleading investors with the Ethereummax project and associated tokens.
In Oct. 2022, socialite Kim Kardashian was charged with unlawfully promoting the crypto asset EMAX. At the time, Kardashian also settled with the SEC for $1.26 million in penalties. In a statement concerning Pierce’s charges, SEC chair Gary Gensler insisted the case is “yet another reminder to celebrities.” Gensler continued, “The law requires you to disclose to the public from whom and how much you are getting paid to promote investment in securities, and you can’t lie to investors when you tout a security.”
The regulator added:
When celebrities endorse investment opportunities, including crypto asset securities, investors should be careful to research if the investments are right for them, and they should know why celebrities are making those endorsements.
The SEC’s charges note that the Basketball Hall of Famer violated the anti-touting and antifraud provisions of federal securities laws. The basketball star settled with the SEC on a non-admit or deny basis and promised not to promote any crypto assets for three years. The SEC further reminded investors to watch Gensler’s video about not making investments “solely on the recommendations of a celebrity or influencer.”
What are your thoughts on the SEC’s recent enforcement actions against celebrities promoting crypto assets and the alleged need for full disclosure to the public? Share your thoughts in the comments section below.
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