Paul Pierce paying $1.4 million in settlement with SEC over cryptocurrency violations
BOSTON -- Celtics legend and Hall of Famer Paul Pierce will pay a $1.401 million settlement with the Securities and Exchange Commission for violations in making public statements about cryptocurrency tokens from EthereumMax.
The SEC announced that Pierce promoted the tokens "without disclosing the payment he received for the promotion and for making false and misleading promotional statements about the same crypto asset."
"The SEC's order finds that Pierce failed to disclose that he was paid more than $244,000 worth of EMAX tokens to promote the tokens on Twitter," the SEC stated in the announcement. "The SEC's order also finds 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."
Pierce did not admit or deny the SEC's charges, but agreed to pay a $1.115 million penalty and roughly $240,000 in disgorgement and interest.
One of the tweets cited in the SEC's filing involved Pierce in May of 2021 sending a tweet directed at ESPN -- his former employer -- in which he said, "I don't need you. I got [EthereumMax]. I made more money with this crypto in the past month then I did with y'all in a year. TRUTH shall set u Free. my own Boss EthereumMax.org check it out for yourself."
The SEC said "Pierce was at least negligent in not knowing that this statement was materially misleading," as he had been paid just $46,000 by EthereumMax when he sent that tweet. Pierce made more than $1 million from ESPN in the previous year. The SEC also singled out several tweets from Pierce, none of which revealed that he was being paid for the promotions.
Other celebrity endorsers for EthereumMax include Kim Kardashian and Floyd Mayweather.
"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 the announcement. "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."