The US Securities and Exchange Commission (SEC) indicted Basketball Hall of Famer Paul Pierce for promoting EMAX tokens and making misleading comments about unregistered crypto securities. The former Boston Celtics forward agreed to settle the charges and pay the SEC $1.409 million.
SEC Chairman Gary Gensler Wants to Remind Celebrities of Disclosure Laws
The main US securities regulator has loaded Former Boston Celtics forward Paul Pierce for illegally promoting the cryptocurrency project called Ethereummax and the EMAX token. The Securities and Exchange Commission charges against Pierce follow a spate of enforcement actions by US regulators against staking services, profit programs, stablecoins and the blockchain ecosystem Land of Do Kwon. According to the SEC’s complaint, Pierce “failed to disclose that he was paid more than $244,000 in EMAX tokens to promote the tokens on Twitter.”
Pierce agreed to settle charges with the SEC for $1.409 million in penalties, rebates and interest. The complaint further alleges that in a tweet, Pierce shared a screenshot of earnings that were much lower than his personal possessions. Another tweet shared the Ethereummax project website, which led to a portal to buy EMAX tokens. Pierce is not the only celebrity who has been fined by the SEC for illegally promoting and misleading investors with the Ethereummax project and associated tokens.
In October 2022, socialite Kim Kardashian was accused of illegally promoting the EMAX crypto asset. At the time, Kardashian also settled with the SEC for $1.26 million in penalties. In a statement on Pierce’s charges, SEC Chairman Gary Gensler insisted that the case is “yet another reminder to celebrities.” Gensler continued: “The law requires you to disclose to the public who and how much you are paid to promote investing in securities, and you cannot lie to investors when promoting a security.”
The regulator added:
When celebrities endorse investment opportunities, including crypto asset values, investors should be careful to research whether the investments are right for them and should know why celebrities are making those endorsements.
The SEC’s charges allege that the Basketball Hall of Famer violated the anti-advertising and anti-fraud provisions of federal securities laws. The basketball star settled with the SEC on a no admit or deny basis and vowed not to promote any crypto assets for three years. The SEC further reminded investors to watch Gensler’s video about not making investments “only on the recommendation of a celebrity or influencer.”
What do you think about the recent SEC 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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