Former NBA star Paul Pierce settled with the Securities and Exchange Commission (SEC) after the entity charged him for unlawfully touting crypto securities on social media, the agency announced today. The SEC sued the Celtics Hall of Famer for promoting EMAX tokens, crypto asset securities offered and sold by EthereumMax, on Twitter while failing to disclose that he was paid more than $244,000 worth of EMAX tokens for the promotion. Without admitting or denying any wrongdoing, Pierce agreed to pay $1.409 million in penalties, disgorgement, and interest and to not promote any crypto asset securities 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 S. Grewal, Director of the SEC’s Division of Enforcement. “Investors are entitled to know whether a promotor of a security is unbiased, and Mr. Pierce failed to disclose this information.”
The SEC also found 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.
EMAX is the same crypto security product that the SEC charged influencer and businesswoman Kim Kardashian with unlawfully taunting in October of last year. Kardashian also settled with the SEC and agreed to pay $1.26 million. “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,” said SEC Chair Gary Gensler. “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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