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Actor Steven Seagal settles SEC case over not disclosing payments for touting cryptocurrency

CNBC logo CNBC 2/27/2020 Dan Mangan
  • The Securities and Exchange Commission said it settled previously undisclosed charges against movie actor Steven Seagal for failing to disclose he was being paid as he touted an investment in an initial coin offering.
  • An SEC order said Seagal agreed to pay $314,000 in disgorgement and penalties for violating anti-touting provisions of federal securities laws in promoting¬†Bitcoiin2Gen, a cryptocurrency system.
  • The SEC said that Seagal "failed to disclose he was promised $250,000 in cash and $750,000 worth of B2G tokens in exchange for his promotions."
a close up of Steven Seagal wearing glasses and looking at the camera: Actor Steven Seagal © Provided by CNBC Actor Steven Seagal

The Securities and Exchange Commission said Thursday that it had settled previously undisclosed charges against faded action movie actor Steven Seagal for failing to disclose that he was being paid as he promoted a cryptocurrency investment.

An SEC order said Seagal, who has agreed to pay $314,000 in disgorgement and penalties, violated anti-touting provisions of federal securities laws.

The SEC said that Seagal, a 67-year-old martial arts expert, "failed to disclose he was promised $250,000 in cash and $750,000 worth of B2G tokens in exchange for his promotions" for an initial coin offering conducted by Bitcoiin2Gen, a cryptocurrency system.

Those promotions included public social media account posts that urged people not to "miss out" on Bitcoiin2Gen's initial coin offering and "a press release titled 'Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2Gen,' " the SEC said.

"These promotions came six months after the SEC's 2017 DAO Report warning that coins sold in ICOs may be securities," the SEC said.

The agency noted that under anti-touting provisions of the federal securities laws, "any celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion."

Seagal, who starred in films including "Under Siege," "Hard to Kill" and "Out for Justice," did not admit or deny the SEC's findings.

But he agreed not to promote any securities, digital or otherwise, for three years, according to the agency.

"These investors were entitled to know about payments Seagal received or was promised to endorse this investment so they could decide whether he may be biased," said Kristina Littman, Chief of the SEC Enforcement Division's Cyber Unit.

"Celebrities are not allowed to use their social media influence to tout securities without appropriately disclosing their compensation."

The SEC's investigation is continuing.

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