The U.S. Securities and Exchange Commission (SEC) has begun enforcing the new marketing rule.
On August 21, 2023, the SEC announced charges against Titan Global Capital Management USA LLC, a New York-based FinTech investment adviser, for “using hypothetical performance metrics in advertisements that were misleading” in addition to various other compliance failures.
According to the press release, the investment adviser violated the new marketing rule by:
• making misleading statements regarding the hypothetical performance;
• omitting material information regarding the hypothetical performance; and
• failing to adopt and/or implement policies and procedures to maintain compliance with the new marketing rule.
Click here to view the Press Release: https://lnkd.in/ecAPhFQt
These charges mark the first enforcement action under the new marketing rule. As stated in the press release:
“’When offering and marketing complex strategies, investment advisers must ensure the accuracy of disclosures made to existing and prospective investors. The Commission amended the marketing rule to allow for the use of hypothetical performance metrics but only if advisers comply with requirements reasonably designed to prevent fraud,’ said Osman Nawaz, Chief of Enforcement’s Complex Financial Instruments Unit. ‘Titan’s advertisements and disclosures painted a misleading picture of certain of its strategies for investors. This action serves as a warning for all advisers to ensure compliance.’”
Has your firm updated its policies and procedures to comply with the new marketing rule?
If your business could use an evaluation of its compliance policies and procedures, or if you are looking for comprehensive compliance solutions, ASG is prepared to help.
Let us show you how outsourced compliance services can help satisfy your regulatory burdens while also allowing you to focus on your business.