The Securities and Exchange Commission (SEC) fined former NBA star Paul Pierce $1.4 million for unlawfully making misleading statements in promoting a cryptocurrency exchange.
The SEC said in a release on Friday that Pierce agreed to settle charges against him and pay $1.409 million in penalties, remedies and interest. The release states that Pierce promoted EMAX tokens, which are cryptocurrency asset securities that are sold by EthereumMax, on social media without disclosing that he received payment for doing so and made false and misleading statements about the asset.
Pierce received more than $244,000 worth of EMAX tokens in exchange for promoting them on Twitter, according to the SEC.
A post in which he promoted the cryptocurrency included a screenshot of an account that showed large holdings and profit, the agency added, but he did not reveal that his own holdings were much lower than what the screenshot 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,” SEC Chair Gary Gensler said in the release.
Pierce is not the first celebrity to be fined over their promotion of a cryptocurrency exchange without revealing that they were being paid to promote it.
Kim Kardashian agreed to pay a $1.26 million fine to the SEC in October for not disclosing that she was being paid to promote EMAX tokens.
Boxer Floyd Mayweather and music producer DJ Khaled were fined in 2018 over their failure to disclose that they were paid to promote a cryptocurrency exchange.
The SEC release states Pierce agreed to pay the fine without admitting to or denying the charges against him. He also agreed to not promote any cryptocurrency asset for three years.
“The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion,” said Gurbir Grewal, the director of the SEC’s Division of Enforcement.