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September 11, 2023 at 05:04 PM
The Securities and Exchange Commission announced more charges Monday related to its ongoing sweep of advisory firms’ compliance with the new marketing rule.
The SEC said it charged nine registered investment advisors “for advertising hypothetical performance to the general public on their websites without adopting and/or implementing policies and procedures required by the Marketing Rule.”
All nine firms have agreed to settle the SEC’s charges and to pay $850,000 in combined penalties.
The firms, according to the SEC, are:
- Banorte Asset Management Inc.
- BTS Asset Management Inc.
- Elm Partners Management LLC
- Hansen and Associates Financial Group Inc.
- Linden Thomas Advisory Services LLC
- Macroclimate LLC
- McElhenny Sheffield Capital Management LLC
- MRA Advisory Group
- Trowbridge Capital Partners LLC
“Because of their attention-grabbing power, hypothetical performance advertisements may present an elevated risk for prospective investors whose likely financial situation and investment objectives don’t match the advertised investment strategy,” said Gurbir Grewal, director of the SEC’s Division of Enforcement, on Monday in a statement.
“It is therefore crucial that investment advisers implement policies and procedures to ensure their compliance with the rule. Until that is the case, we will remain vigilant and continue our ongoing sweep to ensure that investment advisers comply with the Marketing Rule, including the requirements for hypothetical performance advertisements.”
