Site icon Warrior Trading News

SEC Charges Floyd Mayweather and DJ Khaled Over Initial Coin Offerings

Floyd Mayweather

The U.S. Securities and Exchange Commission (SEC) charged music producer Khaled Mohamed Khaled, alias DJ Khaled, and professional boxer Floyd Mayweather Jr. for failing to disclose they received payments for promoting investments in initial coin offerings (ICOs).

The SEC said the boxer did not disclose promotional fees he received from two issuers of ICOs, as well as a payment of $100,000 from Centra Tech Inc. DJ Khaled also failed to disclose a payment of $50,000 he received from Centra, which he touted as a “game changer” on his Instagram, Facebook, and Twitter accounts.



According to a statement released by the securities regulator on Thursday, neither DJ Khaled nor Mayweather denied or admitted the charges. The two men settled the matter out court, with Mayweather agreeing to repay $300,000 in illegal transactions, $14,775 in prejudgment interest, and a $300,000 penalty.

The boxer was also banned from promoting any securities for three years. DJ Khaled agreed to repay the $50,000 amount he received from Centra on top of a $100,000 fine. He is also not supposed to promote any securities, virtual or otherwise, for two years.

“Investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements,” warned 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 fraud,” Peikin added.

Earlier this year, Centra Tech co-founders Sohrab Sharma and Robert Farkas were charged for securities fraud by the SEC after they raised over $32 million through a sham cryptocurrency token sale, which was promoted by DJ Khaled and Floyd Mayweather.



Steven Avakian, SEC’s enforcement division co-director said, “These cases highlight the importance of full disclosure to investors. With no disclosure about the payments, Mayweather and Khaled’s ICO promotions may have appeared to be unbiased, rather than paid endorsements.”

IMAGE CREDIT

Exit mobile version