Kim Kardashian has grown her fortune off sponsored Instagram posts — but onehas landed her in hot water with the SEC.
On Monday, the Securities and Exchange Commission announced charges against_The Kardashians_ star. It stems from a June 13, 2021 Instagram post she madepromoting a crypto asset security offered by EthereumMax. She did not properlydisclose her compensation, violating Section 17(b) of the Securities Act.
(Screenshot: sec.gov)
With the announcement of the charge also came news that a settlement wasreached. Kardashian agreed to pay back the $250,000 she was paid for thepromotion, $10,415.35 in interest and a civil money penalty of $1 million. itmust be paid within 20 days. Further, Kardashian, who is cooperating with theSEC’s investigation, agreed to not promote crypto securities for three years.However, Kardashian, who is studying to become an attorney, neither admittedto nor denied the regulator’s findings.
“This case is a reminder that, when celebrities or influencers endorseinvestment opportunities, including crypto asset securities, it doesn’t meanthat those investment products are right for all investors,” Gary Gensler,chairman of the SEC, said in a press release . “We encourage investors toconsider an investment’s potential risks and opportunities in light of theirown financial goals.”
His continued, “Ms. Kardashian’s case also serves as a reminder to celebritiesand others that the law requires them to disclose to the public when and howmuch they are paid to promote investing in securities… Investors are entitledto know whether the publicity of a security is unbiased, and Ms. Kardashianfailed to disclose this information.”
Kardashian promoted EthereumMax’s offering on Instagram by touting that shehad a “big announcement.” The post linked to the crypto business’s website,where instructions were provided for potential investors to purchase EMAXtokens. While Kardashian included #AD at the bottom of the post, she didn’tdisclose the amount of compensation received in exchange for the promotion.
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Kardashian’s post from June 2021. (Screenshot: sec.gov)
A spokesperson for Kardashian tells Yahoo Entertainment, “Ms. Kardashian ispleased to have resolved this matter with the SEC. Kardashian fully cooperatedwith the SEC from the very beginning and she remains willing to do whatevershe can to assist the SEC in this matter. She wanted to get this matter behindher to avoid a protracted dispute. The agreement she reached with the SECallows her to do that so that she can move forward with her many differentbusiness pursuits.”
Kardashian is worth an estimated $1.8 billion and she’s grown her fortune withher sponsored Instagram posts. During an appearance on My Guest Needs NoIntroduction With David Letterman in 2020, the SKIMS and Skkn founderrevealed that one Instagram post could bring in “more than we do a wholeseason” of former E! show Keeping Up With the Kardashians.
A year before, it was reported that she was making between $300,000 to$500,000 per post — and in some cases $1 million.
She also said in 2019 that she’d become more selective about what she wasaccepting money to post.
“Now it’s a little bit more personal for me,” she said at the New York TimesDealbook Conference. “If I have a paid post that comes in and I think, ‘OK,well this can fund x amount of people that are behind bars, that can help freethem with simple legal fees that they just can’t afford, then that would beworth it to me, even if the post might be a little bit off-brand for me.'”
She has come under fire other sponsored posts over the years, including weightloss tea and other diet products and waist trainers, among things. The familyalso previously severed ties with a bank that promoted a high-fee, prepaiddebit card that featured their image. Former Connecticut Attorney GeneralRichard Blumenthal said it unfairly targeted financially unsophisticated youngadults, including those enticed by the family’s “lives of luxury andextravagance.”