The U.S. Securities and Exchange Commission announced it has settled with former Celtics forward Paul Pierce on charges for unlawfully promoting crypto assets. As a result, Pierce will pay more than $1.4 million for violating anti-touting and anti-fraud provisions.
“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 a 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.”
According to the SEC, Pierce’s charges were for promoting EthereumMax tokens on Twitter without disclosing that he received $244,000 in EMAX tokens for his services. He also tweeted a misleading screenshot that made it seem as if his personal account had more profits and holdings than it appeared.
“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,” director of the SEC’s division of enforcement Gurbir S. Grewal said. “Investors are entitled to know whether a promotor of a security is unbiased, and Mr. Pierce failed to disclose this information.”
Pierce agreed to pay a $1.15 million penalty, plus another $240,000 in disgorgement and prejudgment interest, and he is not allowed to promote crypto assets for three years.
