In Regulatory Wrap for the week to September 13, Jay Hampshire reviews a recent SEC enforcement for misleading marketing.
In this Regulatory Wrap, we cover a $1.24 million fine issued by the Securities and Exchange Commission (SEC) against nine investment advisers for violating the Marketing Rule – which is the largest amount seen yet.
1. The Marketing Rule violations included promotion of “untrue or unsubstantiated statements of material facts” and the use of outdated third-party ratings without disclosure
2. In relation to the latter violation, one firm promoted a third-party rating that was over 16 years old without disclosing that the award was received in 2007
3. Corey Schuster, Co-Chief of the Division of Enforcement’s Asset Management Unit, said the Rule’s “provisions regarding truthfulness, substantiation, and disclosure are critical to protecting investors”
4. Schuster also stated that the SEC will continue to hold investment advisers accountable when instances of noncompliance occur
5. Whether firms are communicating via their own website or on social media channels, it’s important to capture and archive all data to abide by the Marketing Rule
This episode is brought to you by our Senior Content Writer, Jay Hampshire.
Social media has become an advantageous tool firms utilize to advertise and boost their engagement, though when used without related regulation in mind, it can be a costly risk. Ensure you’re accounting for all business communications – including those posted on social media platforms – to accord with regulatory rulebooks.
