Late last week, the United States Securities and Exchange Commission (SEC) charged NBA Hall of Famer Paul Pierce for unlawfully touting and making misleading statements about EthereumMax (EMAX) tokens. According to the SEC’s order, Pierce was paid more than $244,000 worth of EMAX tokens to promote the tokens on social media without disclosing his compensation.
The Rundown on SEC Charges Against NBA Star Paul Pierce
- The EMAX tokens were offered and sold by EthereumMax, a company Pierce was affiliated with. In settling the charges, Pierce agreed to pay a penalty of $1,115,000 plus $240,000 in disgorgement and prejudgment interest.
- This is not the first time the SEC has targeted a celebrity for shilling a cryptocurrency. In 2018, DJ Khaled and boxer Floyd Mayweather Jr. were each charged with failing to disclose payments they received for promoting an initial coin offering (ICO).
- The SEC’s investigation into Pierce’s activities is ongoing, and it remains to be seen what other sanctions will be imposed on him. However, this case serves as a reminder that anyone who promotes digital assets must comply with applicable federal securities laws or face serious consequences.
The SEC’s complaint also alleges that Pierce posted false and misleading statements about EMAX’s profitability and liquidity. In addition, he failed to disclose that he had a vested financial interest in the success of the offering. Pierce agreed to pay more than $1.4 million in disgorgement, penalties, and interest as part of his settlement.
Pierce is the latest celebrity to be targeted by the SEC for promoting digital assets without disclosing their compensation. The Commission has recently taken action against other celebrities, such as Kim Kardashian, for promoting digital assets without adequately disclosing their compensation.
The SEC’s charges against NBA Pierce serve as a warning to other celebrities who promote digital assets without properly disclosing their financial interests in the offering or adequately informing investors about potential risks associated with investing in digital assets. The Commission will continue to take enforcement action against those who violate federal securities laws by engaging in unlawful promotional activities or making false and misleading statements about digital assets.