(NEW YORK) -- Basketball Hall of Famer Paul Pierce has come to a settlement after he touted EMAX tokens, crypto asset securities offered and sold by EthereumMax, on social media without disclosing the payment he received for the promotion, the Securities and Exchange Commission said Friday.
"Pierce did not disclose that he was being compensated by the entity offering and selling the security for giving the crypto asset security publicity," the SEC order said.
Pierce also made false and misleading promotional statements, the SEC said.
Pierce, 45, agreed to settle the charges and pay $1.4 million in penalties, disgorgement and interest.
"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."
Pierce failed to disclose he was paid more than $244,000 worth of EMAX tokens to promote them on Twitter, according to the SEC's order. Pierce also tweeted misleading statements related to EMAX, including 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.
"Despite the claim in this Tweet that he 'made more money with this crypto in the past month then [sic] [he] did with [ESPN] in a year[,]' Pierce was at least negligent in not knowing that this statement was materially misleading. Pierce, whose gross compensation from ESPN was over $1 million the prior year, only received EMAX tokens two days prior to the post, the value of which was approximately $46,000 at the time he was paid," the SEC order said.
Pierce, who worked as a commentator, was let go by ESPN in 2021 after posting offensive photos from a poker game.
The shooting guard played 19 seasons in the NBA, including 15 with the Boston Celtics, where he won a title in 2008. He made 10 All-Star Games and was inducted into the Naismith Memorial Basketball Hall of Fame in 2021.
He's just the latest in a number of prominent celebrities to end up paying huge fines for promoting crypto on social media without disclosing their personal interest in the brands. Kim Kardashian settled with the SEC for $1.26 million for promoting EMAX tokens in October 2022.
Disney is the parent company of both ESPN and ABC News.