Under siege by a U.S. regulator, former action film star Steven Seagal has agreed to pay more than $330,000 for touting an initial coin offering without revealing he was getting paid for his glowing recommendations.
Seagal, who starred in "Above the Law, "The Patriot," and, yes, "Under Siege," in early 2018 used social media posts to urge fans and other investors not to "miss out" on Bitcoiin2Gen's initial coin offering, the Securities and Exchange Commission said in an order issued on Thursday.
The 67-year-old actor and martial arts exponent's promotions also included a news release titled: "Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2Gen," the SEC said.
However, Seagal failed to disclose that he'd been promised $250,000 in cash and $750,000 in Bitcoiin2Gen tokens in exchange for his recommendations. The omission violated federal securities laws that require celebrities and others who tout virtual tokens or coins that are securities to disclose any compensation they receive in exchange.
"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."
Although Seagal did not admit or deny the SEC's findings, he agreed to pay $330,448 in repayment of the funds he actually received, plus a penalty and prejudgment interest. He also agreed not to promote any securities for three years.
"Mr. Seagal was not involved in the creation of this product, nor did he have any prior relationship with the individuals who approached him" for endorsements, defense attorney Ivan Knauer said in a statement. "To him, it was simply a case of someone paying a celebrity for the use of his image to promote a product."
Seagal does not dispute the SEC's contention that the cryptocurrency was classified as a security, said Knauer, who stressed that the actor was not accused of any fraudulent conduct.
"Mr. Seagal cooperated fully with the SEC’s investigation, and this matter is now behind him. He looks forward to continuing his life’s work as an actor, musician, martial artist and diplomat."
Bitcoiin2Gen is an international online company with a website that describes the business as the "world's first self-sufficient cryptocurrency eco-system."
The investigation of Seagal followed a 2017 SEC alert that urged investors to be leery of making financial decisions based solely on celebrity endorsements.
"It is never a good idea to make an investment decision just because someone famous says a product or service is a good investment," the alert said. "Celebrities, like anyone else, can be lured into participating (even unknowingly) in a fraudulent scheme. Also, celebrities are sometimes linked to products or services without their consent so the celebrity may not even have endorsed the investment."
Seagal is a U.S. national who currently lives in Russia, according to the SEC order.
In 2018, the Los Angeles District Attorney's Office announced that Seagal would not face criminal charges in connection with a sexual assault that allegedly occurred in 2002.
Separately, Seagal has been the subject of sexual misconduct allegations made by several women, including actresses Jenny McCarthy and Portia de Rossi. He has not been charged, and Seagal attorney Anthony Falangetti, denied the allegations in a 2018 statement to USA TODAY.
This article originally appeared on USA TODAY: Steven Seagal settles SEC cryptocurrency investigation