Celebrities to Pay Heavy Fines for Promoting ICOs Without Disclosing Payments

cageymaru

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Apr 10, 2003
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The Securities and Exchange Commission has settled charges against boxer Floyd Mayweather Jr. and music producer Khaled Khaled, known as DJ Khaled, for failing to disclose payments they received for promoting investments in Initial Coin Offerings (ICOs). Floyd Mayweather Jr. received $100,000 from Centra Tech Inc. and DJ Khaled received $50,000. DJ Khaled described the ICO as a "Game changer" and Floyd Mayweather promoted the launch of the Centra ICO to his followers as "starts in a few hours. Get yours before they sell out, I got mine..." Floyd neglected to mention that he was compensated an additional $200,000 for two other ICO promotions as he bragged, "You can call me Floyd Crypto Mayweather from now on." They were fined over $765,000 by the SEC and are currently banned from promoting securities in the near future.

Without admitting or denying the findings, Mayweather and Khaled agreed to pay disgorgement, penalties and interest. Mayweather agreed to pay $300,000 in disgorgement, a $300,000 penalty, and $14,775 in prejudgment interest. Khaled agreed to pay $50,000 in disgorgement, a $100,000 penalty, and $2,725 in prejudgment interest. In addition, Mayweather agreed not to promote any securities, digital or otherwise, for three years, and Khaled agreed to a similar ban for two years. Mayweather also agreed to continue to cooperate with the investigation.

"These cases highlight the importance of full disclosure to investors," said Enforcement Division Co-Director Stephanie Avakian. "With no disclosure about the payments, Mayweather and Khaled's ICO promotions may have appeared to be unbiased, rather than paid endorsements." "Investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements," said Enforcement Division Co-Director Steven Peikin.
 

Ultima99

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They didn't think to put a tiny watermark like "Paid promotional endorsement." in the corner?
 

sfsuphysics

I don't get it
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Well at least the fine was larger than their compensation, although not sure how much they made by their manipulation
 
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Literally a half drop in the bucket for Mayweather & I doubt Khaled is going to lose sleep over the money lost either.
 

collegeboy69us

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Isn't that the guy that can't read to save his life? I don't follow sports of any kind... but the name sounds familiar.

Not sure about you guys, but you could park a few metric tons of money in front of me and say "this is yours if we can bash you in the head enough times to make you as stupid as this guy". I'd nope out of that pretty fast. I can't imaging not being able to read.
 

dandirk

[H]ard|Gawd
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I am all for disclosure regulations for things like this...

But if you are taking advice on anything other than boxing from a boxer you sorta deserve what you get. Especially investment advice.
 

sfsuphysics

I don't get it
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Jan 14, 2007
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I'm just hoping that YouTube personalities and other social media celebrities hocking crap get busted for similar actions.
Youtube "celebs" usually arent hocking investments though, so it is a FTC issue not SEC and the FTC isnt quite as harsh
 

RealBeast

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Aug 4, 2010
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Crypto! Bernie Madoff is probably bummed that he didn't think of a scam nearly that big. o_O
 

motomonkey

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Its pretty obvious why... the judge must of been black and threw the book at her. While Mayweather is black and got a slap on the wrist.

Holy fuck, I see posts like this and have to check the URL to make sure I didn't stumble in The Daily Stormer by accident.
 

Zarathustra[H]

Fully [H]
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Well at least the fine was larger than their compensation, although not sure how much they made by their manipulation

Yeah, that's unusual in the financial world.

The big firms usually pay a few millions in fines for illegal behaviors that earned them billions.

At that point it becomes a cost of doing business.
 

DeathFromBelow

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Martha Stewart was convicted of obstruction of justice, making false statements and conspiracy.
Sure, but she was also found not guilty of the more serious charge of securities fraud. I'm willing to bet they could have pushed conspiracy charges in this case.

I just find it interesting that selling some stock based on insider info and telling investigators a story that doesn't add up resulted in jail time, but pushing a shitcoin scam on fans did not.
 
Joined
Jun 13, 2016
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Sure, but she was also found not guilty of the more serious charge of securities fraud. I'm willing to bet they could have pushed conspiracy charges in this case.

I just find it interesting that selling some stock based on insider info and telling investigators a story that doesn't add up resulted in jail time, but pushing a shitcoin scam on fans did not.
The difference is they agreed with the penalties and have cooperated instead of trying their luck in federal court.
 
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