The US Securities and Exchange Commission (SEC) charged ex-NBA star Paul Pierce for touting Ethereum Max (EMAX) tokens on social media without disclosing the payment he received for the promotion and for making false and misleading promotional statements about the same crypto asset.
According to SEC, Pierce failed to reveal that he was paid more than $244,000 worth of EMAX tokens to promote the tokens on Twitter.
Pierce also allegedly posted false information on Twitter about EMAX, including sharing a screenshot of an account with significant holdings and earnings without disclosing that his assets were, in reality, considerably smaller than those shown in the screenshot.
Pierce also included a link to the EthereumMax website in one of his tweets, where visitors could find instructions on ‘how to buy EMAX tokens.’
“The SEC’s order finds that Pierce violated the anti-touting and antifraud provisions of the federal securities laws,” the filing notes.
Pierce agreed to settle the lawsuit with a $1,115,000 fine along with about $240,000 in disgorgement and prejudgment interest “without admitting or denying” the SEC’s findings.
The former NBA player also consented to refrain for three years from endorsing any crypto asset securities.
SEC Chair Gary Gensler stated, “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.”
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, added “The federal securities laws are clear that any celebrity or other individual who promotes crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion. Investors are entitled to know whether a promotor of security is unbiased, and Mr. Pierce failed to disclose this information.”
Last October, SEC charged Kim Kardashian for touting EMAX tokens on social media. The SEC stated that Kim Kardashian agreed to settle the charges and pay $1.26 million in penalties.
In December 2022, Kim Kardashian and other involved celebs beat EMAX crypto lawsuit filed by plaintiff Ryan Huegerich and other investors who purchased EMAX tokens. The judge dismissed the lawsuit because fraud allegations lacked merit and investors also have the responsibility to conduct due diligence on their investment.
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