Basketball Hall of Famer Paul Pierce has reached a $1.4 million settlement with the Securities and Exchange Commission after being charged for making false and misleading promotional statements regarding cryptocurrency and failing to disclose a payment in tokens he received, according to an SEC press release shared on Friday (February 17).
"The Securities and Exchange Commission today announced charges against former NBA player Paul Pierce for touting 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," the press release stated. "Pierce agreed to settle the charges and pay $1.409 million in penalties, disgorgement, and interest."
Pierce is accused of failing to disclose that he was paid more than $244,000 in EMAX tokens as compensation for promoting the cryptocurrency on his Twitter account, which has more than 4 million followers. Pierce also shared a tweet that contained a link to the EthereumMax website, which gave instructions for potential investors to purchase the cryptocurrency 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 in the press release. "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 federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion," said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. "Investors are entitled to know whether a promotor of a security is unbiased, and Mr. Pierce failed to disclose this information."
Pierce is a former NBA Finals MVP, having led the Boston Celtics to a championship in 2008 alongside fellow All-Stars Kevin Garnett and Ray Allen. The Inglewood native recorded 26,397 points, 7,527 rebounds and 4,708 assists during his 19-year NBA career.
Pierce contributed to ESPN's NBA coverage following his retirement in 2017 before being fired by the company in April 2021 after sharing a controversial Instagram Live video.