Former NBA star, Paul Pierce, has been fined US$1.4 million by the US Securities and Exchange Commission (SEC) for promoting cryptocurrency tokens without disclosing the payments he received.
In what was a part of a larger lawsuit involving Floyd Mayweather and Kim Kardashian, Pierce was found to have misled investors while promoting the ethereumMax (eMax) token on his Twitter account.
The SEC charged Pierce with making false and misleading statements, without disclosing the financial implications to the watchdog.
The former Celtic star was paid more than US$244,000 worth of eMax for his promotion of the token, which he flaunted through tweets about his huge ethereumMax holdings and profits.
However, the screenshots of his gains were found to be much lower than what Pierce claimed, leading to his violation of the US anti-touting and anti-fraud provisions of the SEC.
Commenting on the result, SEC chair, Gary Gensler, said: “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.
“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,” he said.
In order to avoid confirming or denying the allegations, Pierce agreed to pay a fine of US$1.115 million and an additional US$240,000 in disgorgement.
The NBA legend also agreed to stay away from promoting any crypto asset securities for the next three years, in addition to the hefty fine he was forced to pay.
