• The Securities and Exchange Commission (SEC) has announced a settlement of $1.4 million with former NBA player Paul Pierce for allegedly promoting a token project on social media without disclosing he had received payment for the promotion.
• SEC Chair Gary Gensler warned investors to be “careful to research if the investments are right for them” when celebrities endorse investment opportunities and noted that they must disclose who and how much they are getting paid for such endorsements.
• The SEC had previously targeted Kim Kardashian with similar charges, settling for $1.2 million in October 2022 after she failed to disclose she’d been paid $250,000 to promote EMAX tokens on her Instagram page.
SEC Settles With Paul Pierce
The United States Securities and Exchange Commission has announced a $1.4-million settlement with former NBA player Paul Pierce for allegedly promoting a token project on social media without disclosing he had received payment for the promotion. According to the SEC, promoters paid the former NBA star $244,000 worth of EMAX in addition to him posting messages allegedly showing misleading information about profits on Twitter.
Gary Gensler Warns Investors
SEC Chair Gary Gensler said investors in crypto projects “should know why celebrities are making those endorsements,” as Kim Kardashian and Paul Pierce did for EMAX through social media. He went on to warn investors to be “careful to research if the investments are right for them” when celebrities endorse investment opportunities and noted that they must disclose who and how much they are getting paid for such endorsements.
Kim Kardashian’s Involvement
The financial regulator had previously targeted Kim Kardashian with similar charges, settling for $1.2 million in October 2022 after she failed to disclose she’d been paid $250,000 to promote EMAX tokens on her Instagram page.
Legal Reminder From The SEC
In its announcement regarding Pierce’s settlement, the SEC reminded celebrities that “the law requires you to disclose to the public from whom and how much you are getting paid” when endorsing an investment opportunity or security — including crypto asset securities — while noting that lying is not allowed either.
Conclusion
In sum, this case serves as an important reminder of compliance requirements when it comes endorsing investment opportunities via social media channels; whether it is done by celebrities or ordinary people alike!