NBA Hall of Famer Paul Pierce settles with SEC over charges of falsely promoting crypto
Federal securities regulators on Friday charged ex-NBA player Paul Pierce with violating anti-fraud and anti-touting rules by. promoting a cryptocurrency on his social media account without disclosing that he was paid to do so.
Pierce earned more than $244,000 in EMAX to push the EthereumMax tokens on his Twitter account, investigators at the U.S. Securities and Exchange Commission said. Pierce misled the public about the digital token's investment performance when he tweeted an image of an account holding large profits even though his own personal portfolio wasn't doing as well, the SEC said.
Pierce agreed to settle the charges by paying $1.4 million in penalties, disgorgement and interest "without admitting or denying the SEC's findings," the commission said. Pierce also agreed not to tout any crypto assets for three years.
A representative for Pierce did not immediately respond to a request for comment Friday.
Pierce is an NBA Hall of Famer from California who played 19 seasons, mostly with the Boston Celtics. At issue is a tweet he posted in May 2021 after being fired from ESPN.
.@espn I don’t need you. I got @ethereum_max 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 Bosshttps://t.co/3irnuWYve3 check it out for yourself
— Paul Pierce (@paulpierce34) May 26, 2021
"ESPN I don't need you. I got EthereumMax," Pierce tweeted. "I made more money with this crypto in the past month then I did with y'all in a year. TRUTH shall set you free."
Intense scrutiny from feds
The crypto industry has been under intense scrutiny from financial regulators in recent months, ever since investors started losing billions of dollars worth of assets in scams or account hacks. The glare grew even hotter last November when FTX Trading declared bankruptcy after experiencing crypto's version of a bank run. In the wake of FTX's collapse, lawmakers in Washington have renewed their calls to regulate the industry.
To be clear, Pierce isn't the first celebrity personality to promote crypto and eventually pay a fine for it. Kim Kardashian in October agreed to pay $1.26 million in a similar settlement with the SEC, linked to the same EMAX cryptocurrency. Like Pierce, she also agreed not to promote crypto for three years.
Other high-profile figures to publicly back various digital coins include Matt Damon, Paris Hilton, Jamie Foxx, Ashton Kutcher, Gwyneth Paltrow and Dennis Cole, better known as Ghostface Killah of the Wu-Tang Clan.
- Tom Brady and Larry David among those accused of defrauding investors in FTX collapse
- Warriors' Stephen Curry, Serena Williams among celebrities named in Bored Ape Yacht Club NFT lawsuit
- LeBron James teams with Crypto.com to teach kids about blockchain
"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 a statement. "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."
Pierce, Kardashian and boxer Floyd Mayweather were also named as co-defendants last year in a class-action lawsuit crypto investors filed against EthereumMax.
In 2018, Mayweather and music producer DJ Khaled settled with the SEC over cryptocurrency promotions.
Khristopher J. BrooksKhristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.
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