Kim Kardashian, A 0.07% Frolic and Detour
I don't want to write about Kim Kardashian. And I won't. Firstly, others have done it much better. Here's John Reed Stark, who knows far more about securities law than I or most anyone ever will. He covers all of the spandex enhanced details.
Let me take a different tack on this story. The SEC went after one celeb--out of several, you can look them up, I've had enough of their names burned into my retinas.
The SEC did not go after the people who paid her to promote their platform, in particular: STEVE GENTILE, GIOVANNI PERONE, JUSTIN FRENCH. Whose names are in all CAPs because I found them via the class action lawsuit filed by the people who perceived profit possibility from the plutocratic pundits but instead paid personal pain. Here it is:
Ethereum Max Amended Complaint
Note: this is a private lawsuit. This not the SEC or FINRA or the Fed, OCC, CFTC, CFPB, NY DFS, or any other financial regulator. Because this is not a regulated financial company or product. Yes, you put money in and someone (not you) gets money out, but it's not covered by the law because, I've been told, it's "new" and "you wouldn't understand".
And so Steve, Giovanni, and Justin didn't think of, didn't care about, and just didn't consider trying to comply with the law about advertising disclosure of paid promotions and about the risks of financial products. SGJ are not part of our church and just shrugged when others pick up their hymnal and intone: "Past results are not indicative of future performance. You may lose some or all of your investment." Their Compliance officer was Casper the Ghost.
Here's all the law that the the plaintiffs allege EMAX violated. And I'll save you reading it. Cause the point is: none of it is financial regulation. The lawyers are instead relying on advertising rules and that old standby RICO, which was designed originally for taking down the Mafia.
Violation of the California Unfair Competition Law Cal. Bus. & Prof. Code §17200
Violation of the California Consumers Legal Remedies Act Cal. Code Civ. Proc. §1770
Aiding and Abetting California Common Law
Unjust Enrichment/Restitution (California Common Law, In the Alternative)
Violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”) 18 U.S.C. §1961, et seq.
Common Law Conspiracy
Violation of the California False Advertising Law Cal. Bus. & Prof. Code §17500, et seq.
Violation of Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”) Ch. 501, §211(1), Fla. Stat. Ann.
Violation of New Jersey Consumer Fraud Act NJSA 56:8-1 to 156
Violation of New York’s General Business Law Art. 22-A, §349, et seq.
Unjust Enrichment/Restitution (California Common Law, in the Alternative)
But the SEC got Kim at least, right? So that's something. She paid $1.3M out of a reported net worth of $1,800M, which is 0.07%, or, allowing for rounding error: 0%.
And one more thing. John Reed Stark spotted the same thing I immediately wondered about, which was, how did the settlement affect the Steve, Giovanni and Justin (assuming they have any EMAX left)?
If you've been reading my posts, or John's, or were born on or before Monday, October 3, 2022, you will not be surprised that the attention did the following:
