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Steven Seagal charged by SEC with failing to disclose payments

SOCHI, RUSSIA - OCTOBER 11: Actor Steven Seagal attends qualifying ahead of the Russian Formula One Grand Prix at Sochi Autodrom on October 11, 2014 in Sochi, Russia. (Photo by Clive Mason/Getty Images)

(CNN) — The Securities and Exchange Commission announced Thursday it had settled charges against actor Steven Seagal for failing to disclose payments for promotional work.

The “Above the Law” star was charged with promoting an investment in an initial coin offering (ICO) conducted by Bitcoiin2Gen (B2G).

According to the SEC, Seagal failed to disclose he was promised $250,000 in cash and $750,000 worth of B2G tokens for his work.

The promotions included posts on his social media accounts encouraging the public not to “miss out” on Bitcoiin2Gen’s ICO, as well as a press release titled “Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2Gen.”

The press release included a quotation from Seagal stating that he endorsed the ICO “wholeheartedly.”

The promotions came six months after the SEC’s 2017 DAO Report warning that coins sold in ICOs may be securities.

In accordance with the anti-touting provisions of the federal securities laws, any celebrity or others who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion.

“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,” Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, said in a statement. “Celebrities are not allowed to use their social media influence to tout securities without appropriately disclosing their compensation.”

The SEC’s order found that Seagal violated the anti-touting provisions of the federal securities laws.

Without admitting or denying the SEC’s findings, Seagal agreed to pay back $157,000, the amount he actually received, plus more than $16,000 in interest, and a fine of another $157,000, the government order says.

Seagal has also agreed not to promote any securities, digital or otherwise, for three years.

In 2018 it was announced that Russia had appointed the actor as a “special representative” on US-Russian humanitarian ties.

CNN has reached out to reps for Seagal for comment about the SEC charges.