By Michelle Price
WASHINGTON (Reuters) - Grammy award-winning rapper Clifford Harris, known as T.I., agreed to pay a U.S. regulator $75,000 to settle charges that he broke securities laws by selling fraudulent crypto-currency investments, the agency said on Friday.
The Securities and Exchange Commission (SEC) said it had charged the Atlanta rapper and actor along with four associates, including film producer Ryan Felton who it says controlled the companies FLiK and CoinSpark that conducted the initial coin offerings which T.I. promoted.
T.I. neither admitted nor denied the SEC's findings, according to the SEC. His attorney Henry E. Mazurek said T.I. regretted getting involved with Felton, whom T.I. had believed to be a local entrepreneur trying to make it easier for new artists to enter the music industry.
The rapper "never received a dollar from Mr. Felton’s failed venture and immediately removed his name from it once he learned that the project was undeveloped," said Mazurek, adding T.I. fully cooperated with the SEC's investigation.
T.I., 39, is best known for 2008 hits “Whatever You Like," “Live Your Life” and “Swagga Like Us," and was featured on Robin Thicke's No. 1 single "Blurred Lines" in 2013.
The SEC alleged that T.I. in 2017 promoted and sold FLiK tokens on his social media accounts, falsely claiming to be a FLiK co-owner and urging his followers to invest in the coins.
FLiK tokens were sold as investment contracts in the company which claimed it would operate as a “Netflix on the blockchain,” a streaming platform where users could buy products and services with FLiK tokens. But Felton allegedly used the funds to buy a Ferrari (NYSE:RACE), million-dollar home, diamond jewelry and other luxury goods, the SEC said.
Felton, the only one of the five who did not settle with the SEC, was also charged by the Department of Justice on Friday.
Felton's attorney Joshua Sabert Lowther said the Justice Department's allegations were "grossly misplaced" and that he looked forwarding to defending himself at trial.