Performance advertising in general, and backtesting in particular, are perennial sources of potential trouble for fund managers. See “Risk Alert Highlights Six Most Frequent Advertising Rule Compliance Issues” (Oct. 19, 2017). A recent enforcement action is a reminder that managers must provide complete and accurate disclosures when using backtested performance and oversee any service providers involved in the backtesting process. In this particular case, a third-party service provider’s use of inaccurate valuation dates and misapplication of a registered investment adviser’s investment model during backtesting resulted in an overstatement of the backtested results of that model by more than 40 percent, which the adviser incorporated into its advertising. This article analyzes the SEC’s settlement order against the adviser. See “How Investment Advisers Can Mitigate Common Advertising Risks” (Jul. 19, 2018); and our three-part advertising compliance series: “Ten Best Practices for a Fund Manager to Streamline Its Compliance Review” (Sep. 14, 2017); “Five High-Risk Areas for a Fund Manager to Focus on When Reviewing Marketing Materials” (Sep. 21, 2017); and “Six Methods for a Fund Manager to Test Its Advertising Review Procedures” (Sep. 28, 2017).