The Securities and Exchange Commission on Friday announced it brought civil charges against retired Boston Celtics superstar Paul Pierce over his promotion of crypto assets on social media. Pierce has settled the charges by paying $1.4 million in a penalty and other fees.
Pierce, the SEC insisted, failed to disclose payment he received for touting EMAX tokens on Twitter, and he also made “false and misleading promotional statements” about the crypto asset security sold by EthereumMax. Pierce was accused of violating the anti-touting and antifraud provisions of the federal securities laws. The settlement does not contain an admission by Pierce (or a denial).
“This case is yet another reminder to celebrities,” SEC chair Gary Gensler said in a statement. “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.”
As part of the settlement, Pierce, who has 4 million Twitter followers and 2 million Instagram followers, will not promote any crypto asset securities for the next three years.
The SEC’s settlement with Pierce occurs during a tumultuous period for the crypto industry, with many star athletes caught in the fallout. Tom Brady, Steph Curry and Naomi Osaka and other prominent athletes have been sued over their promotion and in some instances equity in FTX and could become witnesses in Sam Bankman-Fried’s prosecution. Curry has also been sued for promoting the NFT series Bored Ape Yacht Club.
The SEC isn’t the only federal agency targeting celebrities for misleading and deceptive practices on social media. The Federal Trade Commission has sought regulatory changes to pursue more aggressively “influencers who hide that they were paid to post” and thus better protect consumers who find celebrity recommendations influential. With college athletes now able to profit from NIL, they too could find themselves the targets of government actions for misleading posts.
Pierce, 45, played 19 seasons in the NBA, with 15 of those seasons as a member of the Boston Celtics. Known as “The Truth,” Pierce was the NBA Finals MVP in 2008 when the Celtics defeated the Los Angeles Lakers in the finals. He was inducted into the Basketball Hall of Fame in 2021.
