Hall of Fame basketball star Paul Pierce agreed to a $1.4 million settlement with the Securities and Exchange Commission (SEC) after the SEC charged Paul Pierce for touting EthereumMax tokens without disclosing the payment he received for promoting the tokens, a violation of federal securities laws’ anti-touting provision, and making false/misleading statements. Pierce becomes the latest celebrity to be charged by the SEC.
In 2021, Pierce promoted EthereumMax on Twitter, including providing a screenshot of his account, which did not accurately reveal his EthereumMax holdings. Another tweet linked directly to EthereumMax and gave instructions for individuals to purchase the tokens. Pierce never revealed that EthereumMax was paying him $244,000 to promote the tokens. Thus, the SEC charged Pierce with violating anti-touting laws and making false/misleading statements about his holdings.
Pierce’s settlement includes a $1,115,000 penalty and an additional $240,000 in disgorgement and interest. Additionally, Pierce will not promote crypto assets for three years.
Pierce is not the first celebrity to be targeted by the SEC after promoting a crypto asset. In 2022, Kim Kardashian settled with the SEC for $1.26 million after the SEC charged Kardashian for similar actions when Kardashian promoted EthereumMax without disclosing the payment she received for the promotion.
Additionally, a class action lawsuit is pending in the Southern District of Florida against multiple FTX entities and celebrities, including Tom Brady, Stephen Curry, and Naomi Osaka, relating to FTX’s bankruptcy and the celebrities’ endorsements of FTX. The SEC has not taken any action against the celebrities involved in the lawsuit.
While crypto assets have left the limelight, Pierce’s settlement serves as a warning to celebrities and athletes endorsing securities—be sure to disclose how much you are getting paid for your promotion.