The Securities and Exchange Commission (SEC) charged former Celtics player Paul Pierce for making multiple federal securities law violations relating to his promotion of cryptocurrency. Pierce has agreed to settle, the commission announced on Friday, and pay a total of $1.409 million.
Specifically, the SEC found that Pierce promoted crypto asset securities (known as EMAX tokens) from EthereumMax on social media despite not publicly disclosing that he received more than $244,000 in EMAX tokens to help pitch the product on Twitter.
“The SEC’s order also finds that Pierce tweeted misleading statements related to EMAX, including tweeting a screenshot of an account showing large holdings and profits without disclosing that his own personal holdings were in fact much lower than those in the screenshot,” the commission said in the statement announcing the charges. “In addition, one of Pierce’s tweets contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.”
Officially, the SEC found that Pierce violated the anti-touting and antifraud provisions of federal securities laws. The former Celtic neither admitted to nor denied the findings, according to the commission, and simply agreed to pay the $1,115,000 penalty as well as $240,000 in disgorgement and prejudgment interest.
As part of the agreement, Pierce will not promote cryptocurrency for three years.
“This case is yet another reminder to celebrities: 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,” SEC Chair Gary Gensler said in the statement. “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.”
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