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NBA Hall of Famer Fined by the SEC for Misleading Crypto Endorsements

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The Securities and Exchange Commission announced charges against National Basketball Association Hall of Famer Paul Pierce for endorsing EMAX tokens, crypto asset securities offered and sold by EthereumMax, on social media without disclosing the payment he received for the promotion and for making false and misleading promotional statements about the same crypto asset.

Pierce agreed to settle the charges and pay $1.409 million in penalties, disgorgement and interest.

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. Allegedly, the SEC 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.

“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,” said SEC Chair Gary Gensler. “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.”

The SEC’s order claims that Pierce violated the anti-touting and antifraud provisions of the federal securities laws. Without admitting or denying the SEC’s findings, Pierce agreed to pay a $1.115 million penalty and approximately $240,000 in disgorgement and prejudgment interest.

Pierce also agreed to not promote any crypto asset securities for three years.

As The DI Wire previously reported, multiple celebrities have taken undisclosed paid endorsements from a crypto asset security offered and sold by EthereumMax, and others, such as Kim Kardashian, have been fined by the SEC.

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