The United States Securities and Exchange Commission has announced that Boxer Floyd Mayweather Jr and music producer DJ Khaled will pay thousands of dollars to settle charges that they violated US financial laws. after Mayweather failed to disclose a $100,000 payment, while Khaled failed to disclose a $50,000 payment.
On Thursday, the US financial regulator said the men failed to disclose payments they received to promote certain cryptocurrency investments.
The two celebrities each agreed to pay disgorgement, penalties, and interest to the SEC, though neither formally admitted to or denied the findings. Moreover, neither party admitted to nor denied the charges against them, they agreed to pay certain fees and restrictions. Mayweather will pay $300,000 in disgorgement, a $300,000 penalty, and $14,775 in prejudgment interest. Khaled will pay $50,000 in disgorgement, a $100,000 penalty, and $2,725 in prejudgment interest
Back in May, the three co-founders of Centra — Sohrab Sharma, Robert Farkas, and Raymond Trapani — were formally indicted for running a fraudulent ICO, which raised $32 million from investors in 2017.
Mayweather agreed to collaborate with the investigation and not to promote any kind of securities during the next three years. Khaled has been barred from securities promotion for two years. SEC Enforcement Division Co-Director Steven Peikin commented on the issue:
The SEC has warned investors that it views many of the offerings as investments governed by existing securities laws. Those rules require disclosure of payments in exchange for publicity. In this case, the SEC said Mayweather received $300,000 to promote three separate offerings, including one by Centra Tech, a Miami company that the SEC accused of fraud in April.
SEC Enforcement Division Co-Director Steven Peikin said the cases were a reminder that investors should “be sceptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements”.
Mayweather began promoting Centra’s ICO in September 2017, claiming that he was already using his Titanium Centra card to use digital currencies like Bitcoin (BTC) and Ethereum (ETH) in his business transactions. At that time, Centra’s ICO was the third ICO being promoted by Mayweather.
Just a few weeks later, Khaled joined Mayweather in promoting Centra’s ICO by making public his acquisition of a Titanium Centra Card on his Instagram account.