SEC Brings Enforcement Action Against Investment Adviser For Paying Online Content Creators to Solicit Clients

August 27, 2023

Regulatory Alert

Summary

The United States Securities and Exchange Commission (“SEC”) recently announced an enforcement action against and settlement with an investment adviser firm related to solicitation arrangements with online content providers. The investment adviser firm allegedly paid over $8 million to more than 200 social media influencers and online newsletter providers for prospective client referrals without adhering to the required disclosure and documentation under the former Rule 206(4)-3 of the Investment Advisers Act of 1940. The investment adviser firm has agreed to a cease-and-desist order, censure, and a $250,000 civil penalty to settle the charges by the SEC.

SEC Guidance on Client Testimonials and Third-Party Endorsements

July 27, 2023

New Sample Endorsement Disclosure & Authorization Forms

November 17, 2022

To help registered investment advisers comply with the SEC’s new marketing rule, RIA Compliance Consultants has released two new sample forms: Advertising – Endorser (Unaffiliated) – Disclosure Form & Advertising – Testimonial/Endorsement (No Compensation) Authorization.

New Sample Form – Advertising – Accessibility – Best Practices Checklist

April 28, 2021

RIA Compliance Consultants recently created a new Sample Form, Advertising – Accessibility – Best Practices Checklist.

SEC Adopts New Marketing Rule for Investment Adviser Advertising and Solicitation

January 12, 2021

On December 22, 2020, the U.S. Securities and Exchange Commission (“SEC”) announced it has adopted amendments (also known as the “marketing rule”) to its rules under the Investment Advisers Act of 1940 (“Advisers Act”) that govern advertising and cash solicitation activities by investment advisers registered with the SEC. Unlike the proposed amendments, the SEC’s finalized marketing rule addresses both advertising and soliciting under a single rule. Click here to read the SEC’s final rule release for this new marketing rule for investment advisers.