The Securities and Exchange Commission (SEC) has cracked down on five registered investment advisors.
The SEC has imposed fines on five entities for violating marketing rules in what would be the second wave of regulatory actions within a year.
SEC fines investment advisors
All five companies raised their hands and agreed to pay the fines imposed on them by the government body. The total fines amounted to $200,000, and the SEC also levied other charges.
The SEC’s investigations and orders found that “the five companies advertised hypothetical performance to the general public on their websites without adopting and implementing policies and procedures reasonably designed to ensure that the hypothetical performance was relevant to the likely financial situation and objectives of investment of each advertisement.” public, as required by the Marketing Rule.”
The five companies accused are:
- GeaSphere LLC
- Bradesco Global Advisors Inc.
- Credicorp Capital Advisors LLC
- InSight Securities Inc.
- Monex Asset Management Inc.
Co-Head of the SEC Enforcement Division’s Asset Management Unit. Corey Schuster will comment on tariffs and the importance of the regulations in place to safeguard consumers. He said: “Today’s actions demonstrate that we will continue to employ targeted initiatives to ensure that investment advisers fully comply with their obligations under the rule. They also serve as a reminder of the benefits to businesses that take corrective action before being contacted by Commission staff.”
This is the second wave of marketing rule violations investigated by the SEC. The first wave was brought to light and nine consultancies were hit by regulatory scrutiny in September 2023.
The result of the order would read: “GeaSphere has agreed to pay a civil penalty of $100,000. Bradesco, Credicorp, InSight, and Monex have agreed to pay civil penalties ranging from $20,000 to $30,000, which reflects certain corrective measures each of these companies took before being contacted by Commission staff.
GeaSphere was hit with the heaviest fines as it was found to have deceived SEC orders. The company made false claims in advertisements and failed to live up to its commitments to consumers.
GeaSphere also violated other regulatory requirements, including making false and misleading claims in advertisements, advertising misleading model performance, failing to substantiate the performance shown in its advertisements, and failing to enter into written agreements with individuals for whom it compensated sponsorships.
The order also finds that GeaSphere committed recordkeeping and compliance violations and made misleading statements about its performance to a client of a registered investment firm “which the misleading statements were included in the client’s prospectus filed with the Commission.” .
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