SEC to undertake collection efforts against Steven Seagal for unpaid ICO fine
About two months after the New York Eastern District Court ordered Hollywood actor and producer Steven Seagal to pay the full amount of a fine for unlawful initial coin offering (ICO) touting, the case seems to be far from any actual resolution.
In fact, documents filed by the Securities and Exchange Commission (SEC) with the Court on November 3, 2021, and seen by FX News Group reveal that the regulator is about to undertake collection efforts to get the money Seagal owes as he has not yet paid the full fine he agreed to pay as a part of a settlement with the SEC.
The Commission now seeks to undertake collection efforts including garnishments to collect what Seagal owes it. The regulator requested substitute service, arguing that without it, Seagal may be beyond the SEC’s reach and able to ignore the Court’s Judgment.
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.
According to the SEC, Seagal knows about his obligation to the Commission as he settled and made a partial payment. What’s more, the Judgment garnered press attention so Seagal is no doubt aware of it. Thus, he should be on notice that his failure to pay will lead to collection efforts.
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. The SEC explains that the installment plan required period payments over 330 days. Seagal has paid only $75,000 – the remainder is still delinquent and accruing interest daily.