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9 Firms Charged with Marketing Rule Violations in SEC Sweep

The SEC announced charges against nine RIAs last Monday, as part of its ongoing sweep for Marketing Rule compliance. Specifically, the SEC alleged that the firms engaged in performance advertising without maintaining adequate compliance policies and procedures, and two firms failed to maintain copies of their advertisements. All firms settled with the SEC, for a combined $850,000 in penalties.

The SEC's charges are a reminder that firms should comply closely with the Marketing Rule, including its provisions governing the advertising of gross, portfolio, related, extracted, hypothetical and predecessor performance.

"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.”