Mayweather Ordered To Pay Over $600,000 By SEC For Failing To Disclose ICO Endorsement Compensation

Former pound-for-pound number one boxer Floyd Mayweather reached a settlement with the Securities and Exchange Commission ("SEC") over his failure to disclose endorsement money he received from three securities offered and sold in Initial Coin Offerings ("ICOs").

According to an SEC Order Instituting Cease-And Desist Proceedings (see below), Mayweather is not "admitting or denying" the allegations against him.  However, the SEC laid out their case in the Order.  The SEC found that:

• From July through September 2017, Mayweather promoted three ICOs on his Instagram, Twitter and Facebook accounts, each with multi-million followers, in exchange for approximately $300,000 in compensation.
• Centra Tech, Inc. ("Centra"), which paid Mayweather for his endorsement, conducted the ICO to raise capital for the "world's first Multi-Blockchain Debit Card and Smart and Insured Wallet" which would supposedly allow people to convert hard-to-spend "cryptocurrencies" into legal tender and spend that money using a "Visa- or MasterCard-backed 'Centra Card.'"  The SEC had filed a separate civil action against the founders of Centra alleging that the ICO was fraudulent.
• Mayweather promoted Centra's and two other ICOs without disclosing that he was being compensated or the amount of compensation.  The lack of disclosure violated Section 17(b) of the Securities Act.

Mayweather was ordered to pay $300,000 in disgorgement, $14,775.67 in prejudgment interest, and a civil penalty of $300,000 to the SEC for transfer to the general fund of the US Treasury.  Mayweather also agreed to forgo receiving any compensation for endorsing any securities for the next three years from the date of the order and to continue to cooperate with the SEC's investigation of the matter.

The NY Times had an interesting feature on Mayweather's activity with the ICOs as it was happening in 2017.

See the SEC Order:

Boxing Podcast with VP of Communications at Haymon Sports and the PBC - Tim Smith

My guest on this podcast is Tim Smith, VP of Communications at Haymon Sports and Premier Boxing Champions (PBC).  Tim was a long-time boxing writer, having covered the sport at the Atlanta Journal Constitution, the Cincinnati Enquirer, the New York Times and the New York Daily News before taking his position at the PBC.  We spoke about Tim's years as a boxing writer, the PBC's pursuit of a TV deal on free TV, the PBC's potential teaming up with Dana White and Zuffa Boxing, Top Rank's deal on ESPN, the World Boxing Super Series and Floyd Mayweather potentially fighting in the UFC.  Great discussion - enjoy!

Check out what's going on at the PBC at the following link:  http://www.premierboxingchampions.com/

For more Boxing Esq. podcasts, you can find them on Soundcloud at the below embed or subscribe on either iTunes or Stitcher.  If you enjoy the podcasts, please leave a comment or rating, that would be greatly appreciated.

Boxing Esq. Podcast #3 - John Hornewer

It was my great pleasure to speak with one of the premier attorneys in the sport of boxing, John Hornewer.  John had some amazing behind the scenes stories about his superstar roster of clients, including Lennox Lewis, Chris Byrd, Roy Jones, Jr., Floyd Mayweather and Vasyl Lomachenko.

I'd like to thank John for taking the time to speak with me and I wish him and Team Lomachenko luck against the very formidable Guillermo Rigondeaux this Saturday at Madison Square Garden.

Please check it out!  You can also subscribe to the podcast on either iTunes or Stitcher.

Class Action Suit Against Showtime Alleging Faulty Mayweather-McGregor PPV Transmission Headed To Arbitration

A Federal Court judge in the Southern District of New York recently granted Showtime's motion to compel arbitration in a putative class action brought by plaintiff Victor Mallh alleging issues with Showtime's online stream of the Floyd Mayweather vs. Conor McGregor boxing match.

Judge Denise Cote ruled that the online agreement that viewers had to click their consent to before purchasing the bout on PPV, was "reasonably conspicuous and the plaintiff's click gave his unambiguous consent" to the form agreement to arbitrate and class action waiver contained in the Terms of Use (TOU).

Judge Cote also held that "[c]ourts around the country have recognized that an electronic click can suffice the acceptance of a contract . . . as long as the layout and language of the site give the user reasonable notice that a click will manifest assent to an agreement."  By clicking the "I agree" box, that indicated agreement with the TOU, the plaintiff assented to arbitration.

Judge Cote held that Mallh's action was stayed pending the outcome of the arbitration.

There are similar cases regarding the Mayweather-McGregor online stream that are stayed pending the outcome of this case.

See Judge Cote's order below:


See Showtime's Motion to Compel Arbitration or, in the Alternative, Dismiss the Action:

Mayweather Legal Update

Floyd Mayweather's team is known as the The Money Team (TMT) and of course, where there is money, you'll find litigation.  Currently, there are a number of matters pending involving Floyd Mayweather, either directly or indirectly.

Floyd Sr. gets sued for $20M by former publicist

Let's start with the latest involving Floyd's father, Floyd Mayweather, Sr.  As reported by Paul Gift in Forbes, Ann Barlow, a former publicist for Floyd Sr., is suing him for breach of contract stemming from a public relations and consulting services contract Sr. signed with her.  According to the Forbes article, in 2015, Sr. had sued Barlow over the same agreement, claiming that she had tricked him into signing it, when he really wanted help setting up a nonprofit foundation for sarcoidosis (which he is suffering from).  Sr. dropped the suit but Barlow is now suing him for breach and claiming over $20M in damages.

Showtime looking to consolidate Mayweather-McGregor Streaming Suits in NY

Showtime filed a motion to transfer and centralize eight lawsuits in five different federal districts regarding the loss of streaming services for the Mayweather-McGregor bout to the Federal Court in the Southern District of New York.  The suits allege that either Showtime or affiliate companies of the UFC which offered the Mayweather-McGregor PPV via streaming service, sold a defective product that prevented purchasers from watching the event.

See Showtime's motion below:



Mayweather Promotions files for Default Judgment in "Philthy Rich" trademark dispute

In August 2017, Mayweather Promotions, LLC ("MP") filed an opposition to rapper Phillip Anthony Beasley's attempt to trademark his nom de rap "Philthy Rich".  MP had previously registered the name of Floyd's record label "Philthy Rich Records" with the PTO.  Beasley was required to file an answer to the opposition by October 9, 2017.  Having failed to do so, MP moved for a default judgment before the Trademark Trial and Appeal Board ("TTAB").

See the default motion below:



Ticketmaster sues scalpers for using bots to buy tickets to events, incl., Mayweather-Pacquiao

Ticketmaster is claiming $10M in damages in a suit it brought against Prestige and other secondary ticket brokers for the use of "bots" that buy in bulk tickets available to the public.  The suit alleges the brokers then resell the tickets at a significant markup.  Ticketmaster alleges that the bots were able to circumvent the site's security features and restrictions on tickets per customer to do mass buys for many prominent events.  The suit alleges that the bots purchased the "majority of the tickets available through Ticketmaster" for the Mayweather-Pacquiao fight. 

See the complaint below:

Multi-District Litigation In Re: Mayweather-Pacquiao PPV Dismissed

On August 25, 2017, in the United States District Court, Central District of California, Judge R. Gary Klausner issued an opinion dismissing all of the claims filed in 26 individual actions and 15 consolidated complaints alleging that Defendants Floyd Mayweather, Mayweather Promotions, LLC, Manny Pacquiao, Top Rank, Inc., Michael Koncz, Bob Arum, Todd DuBeouf and HBO all concealed Pacquiao's shoulder injury and mislead the buying public into paying for the fight that they would not have otherwise purchased.

Judge Klausner ruled that letting these claims stand would "disrupt the nature and integrity of competitive sports."   Judge Klausner used the doctrine known as the "license approach" in determining the legal rights of the ticket purchasers.  Under this doctrine, "a ticket to a sporting event gives the purchaser 'nothing more than a revocable license' to view what transpires at the ticketed event, regardless of prior promises or representations about the performance."

Judge Klausner held that "a misrepresentation or omission implicates the core of athletic competitions, and therefore does not constitute a cognizable injury to a legally protected interest under the license approach, if it is related to: (A) competitive strategy, or (B) the quality or outcome of competitive performance." Judge Klausner then reasoned that all of the alleged misrepresentations of the Defendants in regards to Pacquiao's injury fell under either competitive strategy or the quality of the performance.

"The Court is sympathetic to the fact that many boxing fans felt deceived by the statements and omissions made by the fight's participants and promoter.  The proper remedy for such unscrupulous behavior when it implicates the core of athletic competition, however, is not a legal one.  Disappointed fans may demand that fighters be more transparent in the future, lobby their state athletic commissions to impose more stringent pre-fight medical screenings and disclosure requirements, or even stop watching boxing altogether. They may not, however, sustain a class-action lawsuit."

"In this case, Plaintiffs ultimately received what they paid for, namely: the right to view a boxing match between Manny Pacquiao and Floyd Mayweather, sanctioned and regulated by the Nevada State Athletic Commission. Plaintiffs had no legally protected interest or right to see an exciting fight, a fight between two totally healthy and fully prepared boxers, or a fight that lived up to the significant pre-fight hype."

See Judge Klausner's opinion below:

Odds and Ends Post-Mayweather vs. McGregor

• Erik Magraken, at the excellent Combat Sports Law blog, made an interesting find on Floyd Mayweather's pre-fight medical questionnaire. Floyd apparently admitted using injections of Kenalog (an anti-inflammatory) in his hands at 5 a.m. on the day of the fight.  Magraken noted that although Kenalog is a banned in-competition substance according to WADA's prohibited list - the WADA (and USADA, the testing entity) definition of "in-competition" only prohibits ingestion within 12 hours of competition.  Thus, with the fight happening around 9 p.m. PST, Floyd was within the rules to have the injection (depending on how the injection was administered - read the post).

• Zach Arnold, at another great MMA site Fight Opinion, believes that "it is blatantly clear that Conor McGregor will continue fighting in both boxing and MMA."  Arnold also reported that Dana White was "non-committal" about whether WME-IMG may be willing to give McGregor a percentage interest in the UFC in order to keep him in the fold.  Arnold also quoted MMA legend Randy Couture as saying that this fight highlighted the financial issues MMA fighters face vis-a-vis boxing. Couture predicted that more MMA fighters will crossover to boxing in order to reap the sponsorship and PPV upside opportunities that are currently not present in the UFC.

• Though Dana White was initially spewing about the number of PPV buys being above 6.5 million, according to ESPN, it appears the more realistic number is likely to land between 4 and 5 million buys.  Thus, it may not even break the previous PPV buy record set by Mayweather-Pacquiao at 4.6 million buys.