Shivangini Rawat on October 4, 2022
Kim Kardashian is one of the world’s most successful entrepreneurs today. She may have a lot of projects, but breaking promotion rules can be a problem with an oversight commission. Now it appears that it can even affect her career as a lawyer.
Kim Kardashian was charged by the Securities and Exchange Commission on Monday for a post she made to promote a crypto asset security sold by EthereumMax “without disclosing the payment she received for the promotion.” According to the SEC’s announcement, she will pay $1.26 million to settle the civil charges. According to the SEC, Kardashian failed to disclose that she got $250,000 to publish a post about EMAX tokens on her Instagram account. EthereumMax was offering crypto asset security.
“Ms. Kardashian is pleased to have resolved this matter with the SEC,” her lawyer recently told E! News.
Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter. She wanted to get this matter behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.
Kim has also promised not to promote any crypto asset securities for the next three years as part of her penance. “The SEC wants to make certain that when celebrities pitch an investment, investors know whether they are being paid or not,” Andrew Stoltmann, adjunct professor of securities law at Northwestern University, exclusively told the outlet.
That’s important because that goes to the motivation of the person making the recommendation, since we tend to look differently at paid recommendations.
Kim could have added a disclosure on her Instagram post to indicate that she was being compensated, which she was obliged to do, according to Stoltmann. As for the seven-figure fine, “I don’t think it was excessive,” he observed. “I think she had to pay back the $250,000 that she was paid to hype this crypto investment. And then there were penalties, disgorgement [giving up illegally obtained profits], and interest on top. I think the SEC wanted to deter other celebrities from doing something similar, and that’s why they imposed the fine,” he continued.
I think Kim Kardashian did do the right thing by settling this quickly instead of fighting it and sucking up resources from the SEC.
He further stated that, while she was found to have violated federal securities law, this was not a criminal proceeding. Stoltmann also believes that Kim’s legal aspirations will not be jeopardized, as the Skims founder passed California’s baby bar on her fourth attempt last year. However, it is hardly a good first impression for a future attorney.
There is a character and fitness evaluation that everybody who wants to become a lawyer has to go through and they look for things like arrests, they look at things like being sued. And this is a pretty significant issue for her. So, is it a potential speed bump to becoming a lawyer? Yes. Do I think it will preclude her from becoming a lawyer? No.
If or when Kim ends up taking the bar exam, “she will have to disclose it at the time she officially tries to become a lawyer,” Stoltmann continued. “This could potentially prevent her from getting licensed as a lawyer. I don’t think it will, but it could.” Suffice it to say, he said, “it’s not going to be a comfortable discussion” with the state bar association.
Aside from the $1.26 million penalty, Kim’s run-in with the SEC is unlikely to have an impact on her overall status as a branding powerhouse. Let’s see what the future holds for her. To get the latest updates, keep an eye on Thirsty.
What do you think of this story? Let us know in the comments!
October 4, 2022 9:04 am
Disqus Comments Loading...
Must See Photos
