The Securities and Exchange Commission has fined five registered investment advisers $200,000 for making statements about hypothetical investment performance that violate the commission's marketing rules.
The SEC announced Friday that it had settled charges with the companies, which did not admit or deny the charges and agreed to pay fines ranging from $20,000 to $100,000.
GeaSphere, based in Cranston, Rhode Island, received the most severe fine. This fine applies to claims other than advertising hypothetical performance, such as making false or misleading statements in the advertisement, failing to demonstrate the performance of the advertised model, or failing to enter into a written contract with a government agency. It covered additional marketing violations. People who paid for their support.
GeaSphere did not immediately respond to a request for comment.
The other companies, Bradesco Global Advisors, Creditcorp Capital Advisors, Insight Securities and Monex Asset Management, each received fines of $20,000 to $30,000 and were contacted by the SEC, the SEC said. The reduction was due to steps taken to address alleged compliance issues prior to the release. commission.
Advertisement – SCROLL TO CONTINUE
None of the companies immediately responded to phone or email messages seeking comment Friday.
This action highlights that compliance with marketing rules remains a significant concern for the SEC. This suggests that companies are still struggling with the requirements of a relatively new regulation that took effect in November 2022.
“The provisions of the Marketing Rule are critical to protecting investors from misleading advertising claims,” said Corey Schuster, co-director of the SEC's Division of Enforcement's Asset Management Division.
“Today’s action demonstrates that we will continue to adopt a targeted approach to ensure that investment advisers fully comply with their obligations under the rule,” Schuster added. . “They also serve as a reminder of the benefits for businesses that take corrective action before being contacted by Commission staff.”
Advertisement – SCROLL TO CONTINUE
The five lawsuits the SEC announced today are the second round of enforcement actions the SEC has entered into since it began its efforts to examine how companies are complying with marketing rules. Last September, the SEC announced that it had settled with nine RIAs for alleged violations of the rules, with each firm agreeing to pay an $850,000 fine.
As in these cases, companies targeted in new enforcement actions have failed to include the context required by marketing regulations to explain how their investment strategies are relevant to particular investors. The company was accused of promoting hypothetical performances to a general audience on its website. .
As part of the settlement, the companies accepted liability and agreed to develop policies to ensure future compliance with marketing rules.
