Lindsay Lohan, Jake Paul and others charged $400,000 for violating disclosure rules
Mar 22, 2023, 5:50 PM | Updated: 5:51 pm
NEW YORK, NEW YORK - NOVEMBER 10: Lindsay Lohan visits "The Drew Barrymore Show" at CBS Broadcast Center on November 10, 2022 in New York City. (Photo by James Devaney/GC Images)
(Photo by James Devaney/GC Images)
(CNN) — The Securities and Exchange Commission on Wednesday charged Lindsay Lohan, Jake Paul and several other celebrities with failing to disclose that they were paid to promote crypto.
The celebrities agreed to pay $400,000, including fines, and return what they were paid for the promotion.
Lohan was paid $10,000 to promote Tronix tokens offered by Justin Sun’s company Tron.
“Exploring #DeFi and already liking $JST, $SUN on $TRX. Super fast and 0 fee. Good job @justinsuntron,” Lohan tweeted on February 11, 2021. The SEC said Lohan failed to disclose that the tweet was a paid endorsement.
A spokesperson for Lohan said the celebrity “was contacted in March 2022 and was unaware of the disclosure requirement. She agreed to pay a fine to resolve the matter.”
Similarly, Paul was paid $25,000 for an endorsement of Tronix, which he tweeted a day after Lohan.
Other celebrities that agreed to settle their charges include Michele Mason (also known as Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo) and Aliaune Thiam (Akon).
For their violations, Lohan agreed to pay $30,000 in fines in addition to the $10,000 she earned for the promotion. Paul agreed to pay $75,000 in fines on top of the $25,000 he earned.
A spokesperson for Paul declined to comment.
The SEC also announced that it was suing Sun and three of his companies for failing to properly register crypto securities, manipulating markets and failing to disclose paid relationships with the celebrities. It also sued DeAndre Cortez Way, also known as Soulja Boy, who was allegedly a paid endorser for Tronix and failed to disclose his relationship with the company.
A spokesperson for Soulja Boy could not be reached for comment.
“As alleged in the complaint, Sun and others used an age-old playbook to mislead and harm investors by first offering securities without complying with registration and disclosure requirements and then manipulating the market for those very securities,” said Gurbir Grewal, director of the SEC’s division of enforcement, in a statement. “At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation.”
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