SEC commences collection efforts against Steven Seagal for unpaid ICO penalty
About a month after the United States Securities and Exchange Commission (SEC) warned that it would undertake collection efforts against Hollywood actor and producer Steven Seagal who has failed to pay the full amount of a fine for unlawful initial coin offering (ICO) touting, the regulator has actually commenced these efforts. This becomes clear from documents filed by the Commission in the New York Eastern District Court on December 7, 2021.
The documents, seen by FX News Group, show that the SEC seeks a continuing writ of garnishment directed to Comerica Bank, as to the civil money penalty imposed on Seagal. As background, on August 27, 2021, the Court converted the Commission’s order to a Judgment so that the Commission could commence efforts to collect the over $200,000 Seagal owes in disgorgement, prejudgment interest, penalties and accruing postjudgment interest.
The SEC believes that the Garnishee has possession, custody, or control of property in which Seagal has a substantial non-exempt interest or contingent interest including potential lawsuit proceeds.
The regulator notes that it seeks a continuing writ of garnishment only as to the civil money penalty and interest accrued thereon because only this portion of the Judgment amount is a debt as defined under the Federal Debt Collection Procedures Act, 31 U.S.C. § 3001 et seq.
More than 30 days prior to the latest application, the Commission made a demand on Seagal for the total amount still owing. Despite this demand, Seagal has not paid the civil penalty and interest outstanding.
Let’s recall that, in February 2020, the SEC announced settled charges against Steven Seagal for failing to disclose payments he received for promoting an investment in an initial coin offering (ICO) conducted by Bitcoiin2Gen (B2G).
The SEC’s order found that Seagal failed to disclose he was promised $250,000 in cash and $750,000 worth of B2G tokens in exchange for his promotions, which included posts on his public social media accounts encouraging the public not to “miss out” on Bitcoiin2Gen’s ICO and a press release titled “Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2Gen.”
A Bitcoiin2Gen press release also included a quotation from Seagal stating that he endorsed the ICO “wholeheartedly.” These promotions came six months after the SEC’s 2017 DAO Report warning that coins sold in ICOs may be securities. The SEC has also advised that, in accordance with the anti-touting provisions of the federal securities laws, any celebrity or other individual 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.
Without admitting or denying the SEC’s findings, Seagal agreed to pay $157,000 in disgorgement, which represents his actual promotional payments, plus prejudgment interest, and a $157,000 penalty. In addition, Seagal agreed not to promote any securities, digital or otherwise, for three years.
Seagal, however, has not paid the full penalty.