SEC Charges NBA Hall of Famer Paul Pierce for Unlawfully Touting and Making Misleading Statements about Crypto Security
On February 17, 2023, the Securities and Exchange Commission (the “SEC“) charged yet another celebrity for promoting a crypto asset security without disclosing the nature, source, and amount of compensation they received in exchange for the promotion. This time is was NBA Hall of Famer Paul Pierce.
Pierce was charged for touting EMAX tokens, crypto asset securities offered and sold by EthereumMax, 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. Pierce agreed to settle the charges and pay $1.409 million in penalties, disgorgement, and interest.
According to the SEC Order, Pierce failed to disclose that he was paid more than $244,000 worth of EMAX tokens to promote the tokens 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.
In addition, one of Pierce’s tweets contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
The SEC’s order finds that Pierce violated the anti-touting and antifraud provisions of the federal securities laws. Without admitting or denying the SEC’s findings, Pierce agreed to pay a $1,115,000 penalty and approximately $240,000 in disgorgement and prejudgment interest. Pierce also agreed to not promote any crypto asset securities for three years.
Most recently, in October, the SEC charged Kim Kardashian for touting crypto securities without disclosing the compensation she had received for the promotion.
To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected]. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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