The U.S. Securities and Exchange Commission (SEC) on Monday sued John McAfee, creator of the eponymous anti-virus software, alleging that he made over $23.1 million in undisclosed compensation from recommending seven cryptocurrency offerings on Twitter that were materially false and misleading.
The regulator, which is seeking a trial by jury, alleged that from at least November 2017 through February 2018, McAfee recommended cryptocurrencies that he was paid to promote, while falsely denying “he was being paid by the issuers.”
“McAfee leveraged his fame to make more than $23.1 million in undisclosed compensation” by recommending at least seven initial coin offerings or ICOs to his Twitter followers, the SEC said.
McAfee’s recommendations were “materially false and misleading,” in that he tried to sell “virtually worthless” cryptocurrency tokens by encouraging investors to buy the securities without disclosing his own holdings, the SEC alleged.
The SEC is seeking to impose on McAfee a civil penalty as well as disgorgement of ill-gotten gains, with interest. The agency also wants to ban him permanently from serving as an officer or director of any listed company or any company that files reports to the agency.
The agency is pursuing charges against Jimmy Gale Watson, Jr., a bodyguard to McAfee, on charges he aided and abetted the sale of the digital currencies, among other allegations.