Floyd Mayweather and DJ Khaled to pay SEC fines for flogging garbage ICOs

Startups

Floyd Mayweather Jr. and DJ Khaled have agreed to “pay disgorgement, penalties and interest” for failing to disclose promotional payments from three ICOs including Centra Tech. Mayweather received $100,000 from Centra Tech while Khaled got $50,000 from the failed ICO. The SEC cited Khaled and Mayweather’s social media feeds, noting they touted securities for pay without disclosing their affiliation with the companies.

Mayweather, you’ll recall, appeared on Instagram with a whole lot of cash while Khaled called Centra Tech a “Game changer.”

“You can call me Floyd Crypto Mayweather from now on,” wrote Mayweather. Sadly, the SEC ruled he is no longer allowed to use the nom de guerre “Crypto” anymore.

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 Stephanie Avakian of the SEC. “With no disclosure about the payments, Mayweather and Khaled’s ICO promotions may have appeared to be unbiased, rather than paid endorsements.”

The SEC indicted Centra Tech’s founders, Raymond Trapani, Sohrab Sharma, and Robert Farkas, for fraud.

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