SEC Charges Kim Kardashian for Unlawfully Touting Crypto Security (sec.gov) 94
The Securities and Exchange Commission today announced charges against Kim Kardashian for touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion. Kardashian agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate with the Commission's ongoing investigation. From a report: The SEC's order finds that Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax. Kardashian's post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens. "This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn't mean that those investment products are right for all investors," said SEC Chair Gary Gensler. "We encourage investors to consider an investment's potential risks and opportunities in light of their own financial goals. Ms. Kardashian's case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities," Chair Gensler added.
Re: And inteh Mean time the SEC is ignoring ... (Score:1)
Re: And inteh Mean time the SEC is ignoring ... (Score:4, Funny)
Al? Al Gore? Al Roker? Al's Wait & Eat?
Re: (Score:2)
Re: (Score:2)
"It's not a conspiracy theory" -Dude claiming 9/11 was a controlled demolition
Alright grandpa let's get you back to The Villages and set parental controls on your tv to block tucker carlson.
Re: (Score:2)
"Now, why would Muslims want to destroy the SEC investigation into a world stock market theft they were victims hit hardest?"
Simple. They didn't. They wanted to destroy a major US landmark. The SEC investigation was just collateral damage; I doubt they were even aware of its existence.
Re: And inteh Mean time the SEC is ignoring ... (Score:2)
Re: (Score:1)
slap on the wrist (Score:5, Insightful)
A million dollar fine is meaningless to someone who has a net worth of nearly US$2 billion.
Re: (Score:2)
Who?
We are the unintended *victims of a troll war between a person with an oversized ego and a person(/people) too much time on their hands. My current theory is that they're the same person and they truly believe that "no news is bad news". My second best theory is that the first real AI is trying to create human misery through poor trolling. It keeps itself largely hidden from the world on slashdot while it refines its methods.
*victims in that we actually feed them with replies occasionally.
Re:slap on the wrist (Score:5, Insightful)
Fines such as this are not for financially hurting the recipient, they are for negating the profits from and punishing the activity. If $1.25million was irrelevant to her then she wouldn't have needed $250k to publish the post in the first place. She's lost 5x that amount now which one would hope discourages this activity in the future since it would now be a financial loss to her.
Re: (Score:2)
Re: (Score:2)
There's also the possibility that she also invested prior to her endorsement of EMAX and sold shortly afterwards too, and we have no details as to if she even did or not.
You don't think the SEC looked at the possibility of insider trading?
Re: (Score:2)
Insider trading is using confidential information learned through access to company resources to profit from before the information is publicly known.
What she did would be more of a "pump and dump" situation. She wouldn't have needed insider information, she was benefiting from the spike in stock price that came from increased interest generated by her ad. There's not necessarily anything illegal about that provided her advertising was truthful.
Re: (Score:2)
Insider trading is using confidential information learned through access to company resources to profit from before the information is publicly known.
Tell me some more things I know. That's what this shit show is for now, right?
What she did would be more of a "pump and dump" situation. She wouldn't have needed insider information
If she knew she was going to do the ad when she made the investment, but the rest of the world didn't know, and she had reason to believe it would move the stock price, it is insider trading.
You could also consider it a pump and dump, if dumping occurred.
There's not necessarily anything illegal about that provided her advertising was truthful.
Whether the advertising is truthful is irrelevant to insider trading, though it is relevant to pump and dump.
Re: (Score:1)
https://www.investopedia.com/t... [investopedia.com]
Looks like doubledown00 has the right definition of insider trading.
Re: (Score:2)
What she did would be more of a "pump and dump" situation. She wouldn't have needed insider information
If she knew she was going to do the ad when she made the investment, but the rest of the world didn't know, and she had reason to believe it would move the stock price, it is insider trading.
You could also consider it a pump and dump, if dumping occurred.
Bullshit. No. Wrong. Fuck off.
I have seen nothing to indicate that she was neither an officer nor decision maker nor an employee of the crypto company. What she did was a result of her own branding efforts on contract with the company. That is not inside
Re: (Score:2)
However, although I am no fan of Kim Kardashian, she didn't get to be a billionaire by being clueless. She is likely not dumb enough to actually own crypto-currency!
Re: slap on the wrist (Score:2)
Only a fool would think a crypto that pays her a quarters million dollars to simply mention it is an investment worth making. And like parent said, you don't think the SEC looked into her buying/selling the crypto around the announcement?
Re: (Score:2)
Re: (Score:2)
Re: (Score:3)
Right and what a lot people who don't have much wealth and never have had much wealth do not understand is its "easy" to have liquidation value of millions, maybe even billions and still be cash poor, even to be in real financial jeopardy.
Simple closer to home example would be home equity. Lets say you "own" a house worth 300,000. You have 50% equity. If that was your ONLY asset no bank balance, no 401ks etc, we'd say your networth was 150,000, but you'd be at risk of losing ALL of it in a foreclosure situa
Re: slap on the wrist (Score:2)
Bulldhit.
Simple closer to home example would be home equity. Lets say you "own" a house worth 300,000. You have 50% equity. If that was your ONLY asset no bank balance, no 401ks etc, we'd say your networth was 150,000, but you'd be at risk of losing ALL of it in a foreclosure situation. You might be in pretty serious jeopardy of not being able to service the debt if say you lost your income as you have no savings. So while on paper if you only look at the bottom lines it seems like you are doing okay, you situation is really very unstable.
Re: slap on the wrist (Score:2)
Hit reply too soon - if your house is worth $300K and you can't make the payments SELL IT - if you can't sell it and at least cover the amount owed, your house wasn't worth what you paid for it, the valuation was a fantasy.
Because you paid $300K for a house doesn't mean its worth $309K, and in New York State you now have to be really careful with how you value your real estate holdings...
Re: (Score:2)
Right but can you sell it before the foreclosure happens, yes a house in todays market sure you probably can. Now make it not a house make Kim Inc or something like that - Can you find a buyer for the corporation before the bond mature and you default, maybe not - especially when its unclear to those other buyers the value is without the found -or- if you have to hash out a lot of legal question about who retains what intellectual property.
Because you're life is simple and my illustration is simple does not
Re: (Score:2)
Re: (Score:2)
if your house is worth $300K and you can't make the payments SELL IT
You missed the point of the paper value vs real value. A $300k house only gives you a value of $300k if you can liquidate it on short notice to recover $300k. Kardashian may have a net worth of $2bn, but if someone came to her with a $2bn bill she'd be bankrupt instantly because that value is not stored in liquid assets.
Lack of liquidity lowers the actual value from the paper value.
Think of this line from The Thomas Crown Affair: "If I had to be gone, and I mean seriously gone, in about eight hours...how mu
Re: (Score:2)
If she has $2billion in assets and doesn't have $10 million in immediately liquidatable bonds (or even cash) she's insane.
Although I doubt she's really worth $2billion.
Re: (Score:2)
> in New York State you now have to be really careful
> with how you value your real estate holdings...
No, you simply have to be truthful.
Re: (Score:2)
No, she lost 4x that amount which is very low (Score:2)
She lost 4x that amount, that was the punitive part, plus she obviously had to return the amount itself. A 4x penalty is quite low. Tenenbaum was asked to pay $22500 per song, that is about 2000x the cost of each song. Copyright infringement is definitely a different offence, but non-commercial copyright infringement causes nowhere near the harm of illegally peddling pump & dump schemes. And in general, most penalties I've seen that aim to deter (like tickets etc) are usually in the 10x - 20x range. If
Re: No, she lost 4x that amount which is very low (Score:2)
She didn't "return" the $250K payment, that's not how these things work.
The crypto people paid her $250K, she deposited TBE $250K, the sec fined her $1.26M, she has to write a check for $1.26M to the SEC. The crypto folks don't get a refund, and don't get fined for Kim's mistake in not disclosing that she was a paid endorser.
Re: (Score:2)
Copyright infringement is definitely a different offence
Cool so you recognise that you're talking about something completely irrelevant to this case.
And in general, most penalties I've seen that aim to deter (like tickets etc) are usually in the 10x - 20x range.
It would seem most penalties you've seen (like tickets etc) are also completely irrelevant to this case about the SEC fining a breach of financial rules. Now maybe go and look for similar fines for breaching disclosure rules. You'll find they are very much low because... and this is the important part so pay attention... this is a very minor crime and the punishment is usually around this number if you feel like you
Re: (Score:2)
Re: slap on the wrist (Score:2)
Lets look at this seriously:
She mentioned the crypto in one (1) posting
She was paid $250K for the mention
She paid over $1.25M in fines and penalties
A 5x fine for a one-time violation is reasonable.
Saying there's two tiers of justice assumes you or I could be paid a quarter million dollars just for sharing a link to a crypto currency, and we never would be.
Re: (Score:2)
Re: (Score:2)
The 5x is probably reasonable in this case, but I very much doubt that this was the only thing that she pushed without disclosing payment. While the law may only cover securities I think there should be laws requiring disclosure of payment for promoting anything. I would be very surprised if the amount of money she has been payed for promoting other products doesn't make $1.25M look like pocket change.
Re: (Score:2)
Re: (Score:2)
I bet her booty alone is worth $500 mil. [businessinsider.com]
Just a slap on the wrist (Score:5, Insightful)
The SEC declining criminal prosecution and merely mandating a she pay a fine merely shows how there are two classes of justice, slap on the wrist for the rich and grinding punishment for plebs.
Re: (Score:2)
Re: (Score:2, Interesting)
Re: (Score:2)
I'd say 100M. Problem is for her, 1M is just a cost of doing biz.
And what law do you cite that allows for someone to be fine 400X the amount of an illegal transaction. Please be specific.
Her primary biz is stamping her name on stuff. She has made billions doing it. And I doubt she looks at anything except "How much time do you want me to hawk your item" and "How much are you going to pay me". We need to add to that mix, "Is your product a scam" into the equation for influencers. Otherwise, it will remain a cost of doing biz. But I get why they settled. In front of a jury, miss boobs and but would win.
And what part of that justifies that you want to fine an excessive amount other than you don't like her? From my perspective how is that justice as opposed to your personal bias?
Re: (Score:2)
Re: (Score:2)
We don't know if it is excessive.
She lost the payment. She was fined $1M over the amount of the payment. But you are advocating other money she earned having nothing to do with this ad be taken away too. 400X the amount is the amount you want because . . . I am still waiting for a law.
How many people bought & lost money in the scam because miss boobs touted it?
By that logic, Marboro Man models should be executed because of the generations of people who died due to smoking because the Malboro Man looked cool? Actors in fast food commercials can be sued because they made the food appealing. That's your logic.
I'm not sure how to measure, but given the huge number of people who follow her, could easily eclipse the 1M fine. Easily. Where did they come up with the 1M for that matter. Only the 250K is a known quantity, what she was paid. A fine is a fine.
She lost
Re: (Score:2)
Re: (Score:2)
Yes I am advocating a much stiffer fine. Where is the law? Hmm, what law caused her to pay 1M?
It's called a settlement and as such BOTH sides agree to an amount.
Well that law does not spell out a max fine.
Citation needed as I do not believe you can cite any law and are still refusing to cite any.
And I keep saying but you don't respond to my point which is 1M is peanuts to her and will not achieve the goal of making her stop.
And you keep ignoring the point of justice. In the US, we do not punish people based on how much you dislike them or how much you think they should pay. By your logic, a young dislikable person you do not like should get 30 years in prison for jaywalking but a senior citizen who is well loved should only get a few months for multiple murders. That is
Re: Just a slap on the wrist (Score:2)
Does Anyone that subscribes to her blog/vlov/stream/whatever not understand that she is an "influencer" not a financial expert? If people are so stupid as to blindly invest in things they don't understand because Kim K says they should, no level of "paid endorser" notifications would have stopped them.
Re: (Score:2)
Re: (Score:2)
Laws in most places only hurt those who don't have the resources.
If laws everywhere start punishing criminals by fining a percentage of the income or wealth, even the very rich will start to seat up and take notice.
Example where it works :
https://www.theatlantic.com/bu... [theatlantic.com]
The link above even states how they calculate the fine. You can bet that the guy who got fined $103,000 for for a speeding offence in that article (he earned 6.5mil euros that year) will have noticed that fine and was extra careful in the f
Re: (Score:2)
Re:Just a slap on the wrist (Score:4, Interesting)
Let the punishment reflect the real harm done by requiring the fine to be "paid" by doing public service paid at a set rate comparable to the income of those most likely to have invested in this bullshit.
It's unlikely that minimum wage people are really investing in this, so we can use the mean ($17.30) or average ($41) hourly US wage rate. That gives either 72,832 hours or 30,731 hours of public service. Rounding, that comes out to either 36 years or 15 years of full-time public service.
Excessive, you say? Not at all. The wealthy have an abundance of dollars which the non-wealthy do not have, so fines paid in dollars unfairly punish the poor while allowing the wealthy to walk away. By recasting the payment to society into hours worked, the wealthy and poor are both given equal treatment since they both have the same number of hours in any given week. This is what justice looks like if it's fair and not geared toward protecting the wealthy. The only reason it looks harsh is because a huge part of the US justice system is based on protecting the wealthy from any real punishment.
Re: (Score:2)
And what was Kardashian's role in the crypto currency? Was she the founder? Was she handling the transactions? No. Her only role was she was a paid spokesperson. That itself is not illegal. The illegal part is where she did not disclose that she was being paid. For that she lost her payment and was fined $1M above that payment.
By your logic of disproportionate responsibility, that means every actor/model that portrayed "The Marlboro Man" should be on the hook for billions in healthcare suffered by all those
Re: (Score:2, Informative)
No.
The SEC is a regulatory agency and not a law enforcement agency. They do not have the authority or ability to press criminal charges or pursue criminal prosecution. If they find evidence they believe indicates criminal activity, they refer it to the Department of Justice (FBI) who handles any potential criminal investigation. The SEC has absolutely no say in any criminal prosecution, "declining" or otherwise.
Re:Just a slap on the wrist (Score:5, Informative)
https://www.sec.gov/enforce/ho... [sec.gov]
The Enforcement Division assists the Commission in executing its law enforcement function by recommending the commencement of investigations of securities law violations, by recommending that the Commission bring civil actions in federal court or before an administrative law judge, and by prosecuting these cases on behalf of the Commission. As an adjunct to the SEC's civil enforcement authority, the Division works closely with law enforcement agencies in the U.S. and around the world to bring criminal cases when appropriate.
If you honestly believe this means they have "absolutely no say in any criminal prosecution" then you are either ignorant or detached from reality. The laws written are one thing but how they are implemented is quite another.
Re: (Score:3)
If you honestly believe this means they have "absolutely no say in any criminal prosecution" then you are either ignorant or detached from reality.
And you ignored the first part of where he said specifically: "They do not have the authority or ability to press criminal charges or pursue criminal prosecution." That is factually true as the SEC is not part of the Department of Justice. The SEC, as a matter of law, does not have prosecutorial power; they can only work with the DoJ who does the actual prosecution.
The laws written are one thing but how they are implemented is quite another.
Again, the SEC is not part of the Department of Justice. This is not about "implementation" as much as you do not know how government agencies
Re: (Score:2)
you ignored the first part
because I agreed with it.
Again, the SEC is not part of the Department of Justice.
nobody claimed they were.
This is not about "implementation"
No, that's exactly what this is: an abstract ideal on paper versus reality.
as much as you do not know how government agencies work as many agencies do not handle criminal prosecution but refer those matters to the DoJ.
I'm perfectly aware of this fact. I also know that the DoJ isn't about to step all over an SEC deal that avoids prosecution in return for paying the fine. Does the DoJ have the authority to do so anyway? Yes. Will they? No. The fact that you don't realize this means your accusation was mere projection.
Re: (Score:2)
SEC "deals" do not "avoid prosecution". The SEC does not have that authority to negotiate or promise. The DOJ -- the District Attorney's Offices -- make those decisions based on evidence, effort, tea leaves, whatever.
The linked article, which is an SEC Press Release, says:
Kardashian agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate with the Commissionâ(TM)s ongoing investigation.
And it closes out with
...The SECâ(TM)s investigation, which is continuing...
.
Here's a summary on how SEC investigations work [sec.gov]. The relevant quote here would be
As an adjunct to the SEC's civil enforcement authority, the Division works closely with law enforcement agencies in the U.S. and around the world to bring criminal cases when appropriate.
The SEC can't put people in jail. They can, and do, provide copies of their investigations to the U.S. District Attorney (usually o
Re: (Score:2)
I'm perfectly aware of this fact. I also know that the DoJ isn't about to step all over an SEC deal that avoids prosecution in return for paying the fine. Does the DoJ have the authority to do so anyway? Yes. Will they? No. The fact that you don't realize this means your accusation was mere projection.
WTF are you talking about? Sounds like you do not know how government agencies work at all. If the SEC has settled this CIVIL action with Kim Kardashian. The DoJ can indeed still pursue CRIMINAL charges, and they do not have to consult the SEC. The fact that you do not understand the difference between civil and criminal says you really have no clue but pretending that you did.
Re: Just a slap on the wrist (Score:1)
Re: (Score:1)
> there are two classes of justice
Because the gov't can get juicy fees to fill the coffer from the rich, but regular Joanns offer nothing of note.
Re: (Score:2)
Looks like another DC culture shakedown.
They're the one out of touch.
Re: (Score:2)
The SEC declining criminal prosecution and merely mandating a she pay a fine merely shows how there are two classes of justice, slap on the wrist for the rich and grinding punishment for plebs.
Don't be stupid. This is such a minor offence it would never be criminally prosecuted.
Re: (Score:2)
Yes, two different tiers of justice system. But then since Kim Kardashian a high profile person, the question is how much more mischief goes on where no arrests or indictments are made? There is this lecture, back in the days most arrests were for "orderly crimes" instead of property or violent crimes. It would be interesting to see current statistics.
Experience of Being Arrested in U.S. History
https://www.c-span.org/video/?... [c-span.org]
Kent State University Professor Elaine Frantz taught a class about the experi
Hold the influencers responsible (Score:2)
I've said it before [slashdot.org], and I'll say it again. The FTC needs to hold influencers responsible for paid promotions they are making.
Very, very few people understand that influencers are paid vast sums of money to post recommendations for products & services on their channels. There is no law requiring influencers to do this, creating substantial confusion for followers, who far too often perceive them as genuine personal recommendations. Companies know this, and they leverage influencers heavily to take ad
Re: (Score:2)
Very, very few people understand that influencers are paid vast sums of money to post recommendations for products & services on their channels. There is no law requiring influencers to do this
wat [swaygroup.com]
I guess we can all stop reading here since your entire premise is false
Re: (Score:2)
Can we finally write them as "influenzas" to label them as the disease they actually are?
How stupid can one be? (Score:5, Insightful)
Re: (Score:3)
Re: (Score:2)
Butbutbutbut.... celebrity said it's good! If you can't trust your celebrities anymore, we'd have to listen to ... scientists. Ya know, the uncool guys back in highschool.
Yuck.
Re: (Score:1)
40+% are morons.
Trump.
QED.
Re: (Score:2)
"What kind of an idiot would buy crypto on the basis that Kim Kardashian avers that it is secure?"
Hairy ones, who use the same razor that she uses to shave her back every day.
Touting unlawfully! (Score:2)
Yes because having a big butt means you're expert (Score:3)
Seriously? She's a spokesperson, we all know it and this seems a bit of overreach. Will they go after Matt Damon now too?
Re: (Score:2)
Re: (Score:2)
So, what you're saying is everything a Kardashian or a Jenner says needs to have a disclaimer on it? I'd agree with that. I mean if you're stupid enough
to take advice from any of them, for any reason then you deserve what you get.
Re: (Score:2)
Anything they were paid to say needs a disclaimer on it that they were paid to say it.
AFAIK they get to just say the content was sponsored and don't have to say who by, but I've been wrong before. I've certainly seen content marked as "Sponsored content" with no specifics.
Re: (Score:2)
Re: (Score:2)
She has no other role in life! I'm surprised it's not tattooed across her forehead or maybe it's on her ass! "This space for rent?"
I think the distinction is who says it. Obviously, her legal advisors should be rethought but thinking in her family is way down the totem pole. Also, if this applies to "investment" instruments, why doesn't it apply to politicians? "Warning everything you'll hear at this WHPC is bullshit" would need to be at the bottom of every TV screen. I mean they've lost trillions of dollar
Re: (Score:2)
Having a big butt means you're an expert?
And here I was, thinking that my clients only listen to my advice because it's so compelling... thanks for bursting my bubble...
Re: (Score:2)
Well, the proof is in the pudding. Look at Lizzo, eww, well don't but she's now an expert on ordering things in the bathtub.
Weird (Score:1)
Who is taking crypto advice from Kim Kardashian? (Score:3, Insightful)
If it gets the Kardashian clan (Score:1)