Former NBA star Paul Pierce was charged by the SEC on Monday for promoting EMAX tokens, securities offered and sold by EthereumMax, on social media without reporting the cash he received both for promoting the cryptocurrency and for making inaccurate claims about it.
NBA Hall of Famer Paul Pierce charges
Pierce has paid $1.409 million in fines, disgorgement, and interest to settle the charges against him.
According to the SEC’s ruling, Pierce misrepresented the nature of his compensation for promoting EMAX tokens on Twitter, which amounted to more than $244,000. According to the SEC order, Pierce also made false and misleading representations about EMAX on Twitter, such as sharing a screenshot of an account displaying substantial holdings and earnings without disclosing that his own personal assets were in fact much lower than those in the screenshot. One of Pierce’s tweets even linked to the EthereumMax website, where interested parties could learn how to acquire EMAX coins.
Securities and Exchange Commission Chair Gary Gensler said, “This lawsuit is just another reminder to celebrities that the law says you have to tell the public who you are getting money from and how much” getting paid to tout investing in securities, and you can’t lie to investors when you laud a product.” “Investors should be cautious when celebrities recommend investment options, including crypto-asset securities, and should know why celebrities are making those endorsements,” the author writes.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, says that “the federal securities rules are clear that any celebrity or other person who promotes a crypto asset security must disclose the type, source, and amount of money they received in exchange for the promotion.” Investors have a right to know if the person selling them security is looking out for their best interests or not, and Mr Pierce did not tell them that.
According to the Securities and Exchange Commission’s decision, Pierce broke the law by engaging in touting and fraud. Pierce settled with the SEC for $1,115,000 (including a $240,000 penalty), $240,000 (including disgorgement and prejudgment interest), and prejudgment interest. Pierce has committed to a three-year moratorium on promoting any securities backed by crypto assets.
Pamela Sawhney, Jon A. Daniels, and Amanda Rios of the Enforcement Division’s Crypto Assets and Cyber Section, as well as Alison R. Levine, Victor Suthammanont, Kerri Palen, and Lisa Knoop of the New York Regional Office, are conducting the ongoing SEC investigation. The Crypto Assets and Cyber Unit’s Mark R. Sylvester, Jorge G. Tenreiro, and David Hirsch are overseeing the case.