SEC Sanctions Robo‑Adviser for Misleading Marketing and Improper Solicitation Practices

Regardless of how an SEC‑registered adviser renders investment advice, that adviser must comply with all applicable SEC rules. The informality of the internet does not justify use of hyperbolic or misleading marketing materials or payment for referrals in violation of rules for cash solicitations. The SEC recently sanctioned a robo-adviser, which allegedly touted hypothetical performance on its website without appropriate disclosures; paid bloggers for referring clients without complying with SEC rules for cash solicitation payments; and failed to implement or adhere to appropriate compliance policies and procedures. This article details the alleged misconduct and the terms of the settlement order. See “SEC Settles First Two Enforcement Actions Against Robo-Advisers” (Feb. 14, 2019).

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