Floyd Mayweather, DJ. Khaled Charged By The SEC Over ICO Pay

[Ruthless-RKO]

The Securities and Exchange Commission today announced settled charges against five division champion 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). These are the SEC's first cases to charge touting violations involving ICOs.

The SEC's orders found that Mayweather failed to disclose promotional payments from three ICO issuers, including $100,000 from Centra Tech Inc., and that Khaled failed to disclose a $50,000 payment from Centra Tech, which he touted on his social media accounts as a "Game changer." Mayweather's promotions included a message to his Twitter followers that Centra's ICO "starts in a few hours. Get yours before they sell out, I got mine…"

A post on Mayweather's Instagram account predicted he would make a large amount of money on another ICO and a post to Twitter said: "You can call me Floyd Crypto Mayweather from now on." The SEC order found that Mayweather failed to disclose that he was paid $200,000 to promote the other two ICOs.

Mayweather and Khaled's promotions came after the SEC issued its DAO Report in 2017 warning that coins sold in ICOs may be securities and that those who offer and sell securities in the U.S. must comply with federal securities laws. In April 2018, the Commission filed a civil action against Centra’s founders, alleging that the ICO was fraudulent. The U.S. Attorney's Office for the Southern District of New York filed parallel criminal charges.

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. "Social media influencers are often paid promoters, not investment professionals, and the securities they’re touting, regardless of whether they are issued using traditional certificates or on the blockchain, could be frauds."

[ironbeard]

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[Ruthless-RKO]

Floyd Mayweather settles with SEC over digital coin promotions

Floyd Mayweather agreed to repay more than $600,000 as part of a settlement with the Securities and Exchange Commission that he failed to disclose payments he received for promoting investments in digital-currency securities.

The settlement of civil charges for violating rules on touting investments in so-called initial coin offerings, or ICOs, was announced Thursday by the SEC.

Without admitting or denying the findings, Mayweather agreed to repay $300,000 in illegal transactions, a $300,000 penalty, and $14,775 in prejudgment interest. Mayweather also agreed not to promote any securities, digital or otherwise, for three years

The SEC said Mayweather failed to disclose promotional payments from three issuers of ICOs, including $100,000 from Centra Tech Inc.

Music producer DJ Khaled was also fined by the SEC and agreed to a similar promotion ban for two years. Khaled allegedly didn't disclose a $50,000 payment from Centra, which he touted on his social media accounts as a "game changer."

Kelly Swanson, a publicist for Mayweather, said he likely wouldn't comment on the settlement. Representatives for Khaled didn't immediately respond to messages seeking comment.

The Associated Press contributed to this report.